Name: olatunde Jackson Adeoye

Student Number:31002792

FUND MANAGEMENT
Assessment 1
 Introduction
The oldest monetary investment confidence in the world is F&C Investment, along with the which was
founded in 1868 with the goal of introducing the benefits of cutting-edge and moral investment to a wider
audience. They adopted the same approach from the start: to provide a solid basis in order to provide
reliable, long-term growth in capital and substantial dividend revenue.
QUESTION 1
Critically evaluate the strategy and objectives of the fund.

I will be discussing the strategy and the objective fund applied by the fund manager of the F&C investment as
follows.

Strategy
 Diversification strategy
 Straight forward strategy
 A balance-proving strategy

Diversification: The Definition of a Diversification Strategy Is to Introduce New Items Into New Markets, As The Figure
Below Plainly Illustrates. A Diversification Strategy, And What Makes It an Excellent Plan for Corporate Expansion?

New product market development diversification

old product market penetration product development

exiting product new product

source by( Igor Ansoff in 1957)

I highlight when and why this particular technique would be the greatest growth approach to utilise by F&c
Investment when I explore the numerous uses of it and show the potential benefits it may have on an organisation.

Businesses use diversity to help in their development into markets and areas that they haven't previously explored.
Companies expand primarily to increase revenue. This will be done by introducing new products, services, or features
that cater to customers in these developing markets.

Straightforward strategy: Being clear in discourse equates to simplicity. Be direct and unambiguous in your
request when asking a buddy for a favour.
A balance-proving strategy: The balanced scorecard includes financial measures that show how prior actions have
affected current outcomes. Furthermore, it covers operational metrics that affect future financial results, such as
customer satisfaction, internal processes, and creativity and enhancement initiatives inside the business.

Let's talk about the balanced scorecard utilising the dials and signals in the aeroplane. To properly navigate and
operate an aircraft, pilots need a thorough understanding of many flight-related subjects. They need information on
fuel, airspeed, higher elevations, heading, location, and other signs that summarise the present and predicted
environment. Relying on only one instrument might be disastrous. Like how, given the complexities of contemporary
corporate management, managers must be able to evaluate achievement in multiple fields simultaneously.

Managers may examine the firm from four key aspects using the balanced scorecard. Refer to the table below, "The
Balanced Scorecard Links Performance Measures."

Balance scorecard that links the performance measure to their new approach

Financial perspective how do we look to shareholders.

goals measures

how do customers
see us?

Customer perspective internal business perspective

Goals measures goals measures what must we excel at

Innovation and learning

perspective
goals measures

can we continue to improve

and credit value?

source from Robert S. Kaplan (Jan 1992)  is a senior fellow and the Marvin Bower Professor of Leadership
Development, Emeritus, at Harvard Business School.

A version of this article appeared in January–February 1992 issue of Harvard Business Review.

Customer Perspective: Today, the client is at the center of the corporate missions of many businesses. A
common mission statement is, "To be the best at providing value to customers." Therefore, senior
management now places high importance on a company's customer-focused performance. Managers must
transform their overall mission statement for customer service into metrics that accurately reflect the
elements that matter most to customers to comply with the balanced scorecard.

Internal Business Perspective: Measurements based on customers are important, but they have to be
translated into assessments of what the company must do inwardly to please its customers. Outstanding client
satisfaction is the result of internal organisational policies, decisions, and actions. Managers must prioritise the vital
internal processes that aid in meeting customer requirements. The balanced scorecards provide this inner
perspective to managers.

Innovation and Learning Perspective: The balanced scorecard identifies the factors that the organisation
believes are most crucial for competitive performance. These factors are customer-based and internal
business process metrics. But the goals for success are always shifting. Due to the fierce global
competition, businesses must be able to both create completely new goods with enhanced capabilities and
make continuous changes to their current products and processes.

Objective
Moving additionally in my clarification of the aim of F&C investment is very consistent in their strategy, as they have
openly declared their goal to transition the portfolio they manage to net zero carbon emissions by 2050 and are
working with their manager, Colombia Threadne. The F&C investment goals are very equipped in the area of making
sure their customers are pleased with their investment decisions and get their return without forfeiting their money.
In reality, many of their invested businesses currently participate in projects that support the UN's Sustainable
Development Goals (SDGs). These By 2030, these objectives provide a bold roadmap for creating a more sustainable
global economy and society. They also provide a helpful foundation for business participation. Their structured
integration of ESG components into their investment strategy is essential to their thought with the objective of
reducing risk and achieving profitable expansion over the longer term. Their manager's long-standing involvement
and the voting plan aim to bring about improvements for investee firms that fall short of these objectives. They
concur with their manager's assessment that businesses that place a high priority on ESG management may reduce
business risks and achieve long-term sustainability. The boards of investee firms are required to disclose to their
shareholders if they are properly controlling critical issues, such as labour. The majority of the time, they believe that
interacting with firms before separating or rejecting investment opportunities is better in terms of standards,
environmental management, and tax regulations. In order to reduce risk, improve efficiency, spread best practises,
and ensure long-term value for investors, Colombia Threadneedle Investments engages with companies on critical
ESG problems. As a result, as they strive to establish a net zero carbon portfolio, their manager will continue to
interact with investee firms actively, hold them responsible for their promises, and exert pressure on them to have
credible, clear routes to reaching both their short- and long-term goals. They have only so far imposed minor
investment exclusions, but if participation does not move enough rapidly, they are going to continue to do so if
involvement does not move quickly enough to provide results that are consistent with their own goals of going net-
zero.
Choosing stocks responsibly is only one component of investing. Over the past 20 years, their management has
worked with more than 5,700 organisations, and as a result, 4,106 positive improvements have taken place. Due to
their ability to exercise leadership in terms of voting and participation, they have improved and raised their ESG-
related reporting significantly.

Comparison
In addition to my explanation, I will be talking about diversification and generic strategy to
see the strategy that has more advantages and longer sustainability in business.
Diversification is a growth strategy known as a strategy that can be expanding your firm into new markets
or industries while simultaneously developing a new product specifically for those markets.
There are several different types of diversification, and I will quickly mention one of them.

 Concentric diversification: involves the integration of new products that, although

attractive to new audiences, are technically or economically complementary to current
brands or sectors. For instance, a PC manufacturer may start producing laptops. You
might be able to expand your portfolio in this fashion using the technology, assets,

Advantage disadvantage

increase sales and revenue diversifying too quickly may cause you to lose

track or dilute your core products or services.

grow market share. Stretching resources too thin may make it

. Difficult for you to deliver.

limit the impact of changes in the market. It may limit the potential of growth in a core area.

Generic strategy

By using Porter's generic, a business may avoid becoming "stuck in the middle." A company would frequently try
to focus on both cost and differentiation, which might lead to confusion. On the other hand, Porter's generic
approaches advocate focusing on one technique that plays to your best qualities. Additionally, it enables
businesses to experience growth in revenue, sales, and market share.

Advantage disadvantage

Selecting the best strategy one strategy for life

Focus on strength. Strategy selection is tough.

It creates entry barriers.

Its increases profit.

To finalise my comparison, the diversification strategy is better for F&C INVESTMENT COMPANY in their
businesses because it makes their decision more flexible than the other strategy porter generic which
cannot allow a business to have many options you will only have one option it means you keep all your
eggs in one basket and this not good for a businessman.
Question 2

Critically evaluate the approach taken by the fund management company to the management of the fund.

The diversification strategy is to provide long-term income and capital growth. To accomplish this, Paul
Niven, Fund Manager makes investments in shares of well-established businesses, promising entrants,
and rising stars in emerging markets on the main stock exchanges across the world. This diversified
portfolio approach exposes investors to a variety of well-managed private equity funds. their plan of action
may be comfortable with you whether you're new to investing or hoping to build a solid foundation for
your current portfolio.

The strategy adopted by the fund manager is the best strategy portfolio to choose because this gives an
edge to invest in more areas of the business and to be flexible to meet up the long-term sustainability of
their client in making a profit.

Question 3

F&C Investment Annual Report and Accounts for years 2019 to 2021
ASSET

£’m 2019 2020 2021

Fixed Assets

Investments 4,512,321 4,856,368 5,779,123

Current asset

Debtors 20,563 23,675 8,267

Cash and cash equivalents 28,196 46,654 53,111

Total current assets 48,759 70,329 61,378

Creditors: amounts falling due within one year

Loan (75,000) (40,000) (110,452)

Others (15,861) (8,521) (9,277)

total current Liability (90,861) (48,521) (119,729)

Net current assets/(liabilities) (42,102) 21,808 (58,351)

Total assets less current assets/(liabilities) 4,470,219 4,878,176 5,720,772

Creditors: amounts falling due after more than one year

Loans (360,595) (366,041) (439,263)

Debenture (575) (575) (575)

(361,170) (366,616) (439,838)

Net assets 4,109,049 4,511,560 5,280,934

Capital and reserves.

Share capital 140,455 140,455 140,455

Capital redemption reserve 122,307 122,307 122,307

Capital reserves 3,735,063 4,147,868 4,924,320

Revenue reserve 111,224 100,930 93,852

Total shareholders’ funds 4,109,049 4,511,560 5,280,934

Net asset value per ordinary share – prior 757.26 840.69 1,002.49
charges at nominal value (pence)

To the analysis of the balance sheet for F&C investment, it shows that the operational method the fund manager is
using( diversification strategy) is better for the company because their current ratio for the three years of their
operation still shows 1.00% In the year( 2019, 2020, 2021 )respectively and this shows that they can pay short-term
debt and their dividend when due and also it reviews that in the year (2021), their performance is very good by
having net asset of 5,280,934 compare to the year (2019) 4,109,049

The current ratio table for the fund performance for three years is demonstrated below.

current ration chart

1.11%
percentage

1.09%
1.07%

2019 2020 2021

Axis Title

current ration current ration2 current ration3

F&C INVESTMENT CURRENT RATIO ANALYSIS FOR THE THREE YEARS OF OPERATION

Conclusion
Finally, I think the diversification method has made the fund manager of F&C INVESTMENT perform well in the area
of sustainability of long-term profitability because F&C INVESTMENT can be able to pay short-term debt and their
dividend when due as I demonstrated in my chart you can see in 2019 to 2021 respectively 109% and 108% in those
two years 2020 and 2021. Their current ratio is good for the company.

reference

JASON FERNANDO Updated March 25, 2023, CORPORATE

FINANCE   https://www.investopedia.com/terms/c/currentratio.asp
FCIT IR 2019 v6.indd financial statement for F&c INVESTMENT PLC
https://docs.columbiathreadneedle.com/documents/F&C%20-%20Interim%20Report%20and%20Accounts%2020
FCIT IR 2020 v10.inddFCIT financial statement for F&c INVESTMENT PLC
https://docs.columbiathreadneedle.com/documents/F&C%20-%20Interim%20Report%20and%20Accounts
%2020https://docs.columbiathreadneedle.com/documents/F&C%20-%20Interim%20Report%20and%20Accounts
%2020 2020 v10.indd
Sanjay Borad 2009 "Financial Management Concepts in Layman's Terms"
https://efinancemanagement.com/financial-management/pros-cons-porters-generic-strategies