It has been a big year for Orchard Street Investment Management.
In July this year, the fund manager, a relative minnow in the sector, was selected to manage St James’s Place’s property assets, valued at more than £800m, after it terminated its contract with Invista.
The win boosted Orchard Street’s UK AUM by 57%, propelling it into 18th slot, up from 27th last year on up-to-date numbers.
At a recent meeting with St James’s Place’s chief investment officer, Chris Ralph, and Orchard Street co-founder and chairman, Chris Bartram, Ralph explained that the background of corporate change at Invista drove the decision to leave its inaugural property fund manager.
“The Invista management team couldn’t describe the journey they were on, so we had to take an objective, rational decision and felt it was not in our best interests to continue that relationship.”
The selection of Orchard Street – from a handful of shortlisted parties which Ralph unsurprisingly demurs from sharing – was driven by a “desire for a long-term relationship” with a manager “where there is an alignment of interests”.
For Orchard Street, which was founded by former Haslemere chief executive Bartram in 2004 in partnership with ex-Haslemere colleagues David Lee and Gary Felce, the mandate presents an opportunity.
“It is unusual for a firm such as ours, which specialises in segregated mandates, to have a strong relationship with a major player in the private savings market. We see it as a joint venture.”
He adds that for a firm that was founded on the basis of just one major pension fund client and has added two more major clients over its seven-year lifetime, it presents “a very powerful new avenue”.
However, this will not distract Bartram and his team, including partner John Humberstone, from the task of taking over management of the fund and integrating six former Invista staff into what is now a 17-strong team.
Management of the two funds’ current assets, which number around 59, is going to be “evolution, not revolution”, according to Bartram. It will also involve the investment of around £200m of cash from the vehicles, which will target retail and multi-let assets.
