He says: “Its certainly true that as a fund manager I thought us guys in the front office were the stars. I went from running an investment division at Standard Life to being a chief executive.
"But when I was running a division I got a lot of my validation from being a good investor. As chief executive, obviously the remit is much wider, I have to care about far more things. But I think the key is to create an executive team who know far more about everything than I do. I will never know as much about IT as our head of IT, or about cybersecurity as our head of that department. I hope the fund managers we employ realise that they need the back office as well – not that we pay fund managers badly.”
Munro says his decision to depart Aviva Investors in 2021 was “entirely my choice, I got offered a great opportunity at Newton” – though it is worth noting that shortly after his departure was announced, Aviva Group chief executive Amanda Blanc announced cutbacks to the unit he had run, with a number of redundancies, including of head of equities David Cumming, who has now joined Newton.
Aviva Investors has assets under management of £262bn, which is considerably higher than the AUM of Newton. Many market participants take the view that Aviva Investors has not had a standout product for many years, but has been overly reliant on its absolute returns fund – the product originally launched by Munro, and which has underperformed in recent years.
Munro’s new business is part of the wider BNY Mellon group, and “has its own swim lane", he says. "We do the global equities and sustainable investing and have a real return product. Those are the areas we will focus on, and it is my job to grow the business organically."
He says the opportunity will come due to the shift in focus of the market away from growth stocks and passive strategies.
Growing pains
Munro says: “The key thing is demographics, which show that more people are going to need retirement income, and that needs to be their focus, not trying to outperform the Nasdaq. I see my role as being to help clients with what they need, even if they don’t know they need it.
"In recent years, the world of low interest rates, equity income and many of the other strategies we run have been unfashionable due to market conditions, but that is changing, and so now my job is to stop the outflows here.”
