RESOLUTION Asset Management underlined its ambitions yesterday as a big-league investment house by announcing Ian Paterson Brown, a veteran of venerable Edinburgh institution Ivory & Sime and successor organisations, was joining as chief operating officer at its Glasgow headquarters.
RAM chief executive Gavin Stewart declined to reveal how much the business would pay the highly-regarded Paterson Brown.
However, given Paterson Brown earned GBP170,000 in salary and fees and a GBP375,000 bonus in 2005 as chief financial officer of Ivory & Sime successor organisation F&C Asset Management, it would seem likely his latest job will also be a highly-paid berth.
Paterson Brown's long service was highlighted by F&C when he stepped down at its annual meeting this May. However, Stewart said RAM's new recruit was still "very young" at 52. Paterson Brown booked GBP1.227m compensation for loss of office in 2005, ahead of his departure from F&C, including what his former employer described as "a proposed augmentation of GBP514,000 to Mr Paterson Brown's pension arrangements".
RAM, formerly Britannic Asset Management, has been without a chief operating officer since Stewart, who had held that position, took over as chief executive when Leslie McIntosh was levered out of the top post in May 2004.
Stewart, who joined BAM as chief operating officer in January 2003, said: "When I first joined Resolution or Britannic . . . I joined as chief operating officer. It (this role) hasn't existed since I became chief exec. I didn't thinkwe needed it at the size we were then. As we have expanded, it has become necessary that we have that extra strength (added) to our overall team."
When Stewart became chief executive, the investment house managed funds of about GBP14bn. Boosted by parent Britannic's merger with Resolution, completed in September 2005, and by organic growth, the renamed RAM now runs about GBP39bn directly.
This GBP39bn includes about GBP1.5bn of Abbey National life and pension funds which had been outsourced to third-party asset managers but have been brought in-house following Resolution's acquisition of this Glasgow-focused Abbey division this summer.
About a further GBP1bn is due to be taken back in-house, which will take RAM's direct funds under management to about GBP40bn.
Stewart noted RAM had oversight of all of the Abbey funds. The vast bulk of these continue to be managed on an outsourced basis, mainly by State Street, and Stewart said their inclusion would take RAM's funds to GBP60bn.
However, asked if more than the total GBP2.5bn of Abbey funds already earmarked to be managed directly by RAM would transfer across ultimately, Stewart replied: "No plans to do anything on that. The key bit for us is managing the money we have got as well as we can. There will be plenty of other opportunities for us."
Edinburgh-based Ivory & Sime's blue-blooded reputation has been contrasted by industry players with the Glasgow fund houses including RAM and its predecessor organisations.
Asked if it was remarkable that an Ivory & Sime veteran was joining RAM in Glasgow, given this perceived cultural divide, Stewart replied: "I think probably for the old Britannic operation probably it would have been a bit . . . I think we have probably surprised people with how much we have done over the past (two) years. Ian sees it as an exciting place to be joining. I would hope others would see it that way as well."
Staff numbers at the RAM operation stood around 275 when Stewart became chief executive of predecessor organisation BAM in May 2004. The workforce is projected to rise to 360 by the end of this year.
Paterson Brown, who will be on the board of RAM, will join on November 6.
RAM said he would have responsibility for information systems, finance, corporate development, human resources, investor operations, legal and secretariat and facilities.
Stewart, since becoming chief executive, has earned plaudits for forming innovative joint ventures with stronglyperforming individual fund managers, augmenting the traditional business.
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