By Magnus Spence, 11 June 2015Market Intelligence | Investment Products
At the launch event for Institutional Money in Motion at the Crypt of St Etheldreda’s Church in Holborn. 5th June 2015, Magnus Spence welcomed guests with the story of iMiM’s birth. And he talked about a tawdry saint, a near treacherous Shakespeare, a great statesman not unlike Tywin Lannister, and a devastated London.
My name is Magnus Spence I am the managing director of Spence Johnson. I want to welcome you to this event to mark the launch of Institutional Money in Motion or iMiM as we call our new baby.
In a minute I am going to tell you something about how Institutional Money in Motion was conceived and born. In some senses, in this religious place, this evening is a christening ceremony, I suppose.
But first let me tell you something about this very special 700 year old church, and its links with a tawdry saint, with a near treacherous Shakespeare, with a great statesman not unlike Tywin Lannister, and with a devastated London. This history tells us a little about the birth of iMiM as well as reminding us how far we have come as a city and as a culture.
St Etheldreda’s Church nowadays sits squeezed rather uncomfortably I feel into to a residential street.
But it was once part of a 58 acre complex called Ely Palace, the London home of the Bishops of Ely in medieval times.
You can see here an impression of it how huge it was in the 16th century, with St Etheldreda’s chapel clearly visible on the left.
Behind the palace and the Fleet River lies old St Paul’s, and then far off eastwards in the distance, 30 minutes walk away, is the other side of London and the Tower.
Later I want to tell you about how iMiM has moved across this same landscape in modern London.
The patron saint of Ely was Etheldreda, also known as Audrey, who was an Anglo-Saxon princess who lived in the 7th century. So she gave her name to this church and her statue is upstairs.
She was revered in her East Anglian home region among other things for setting free all the bondsmen on her lands and she led a life of exemplary austerity, for which she was made a saint.
For nearly 8 centuries after her death lace momentos that were said to ward off illness were sold in her name. They were called ‘tawdry’ lace – shortened from ‘St Audrey Lace’. This practise was well known - Shakespeare mentions them in a Winter’s Tale for example.
After the reformation buying tawdry lace was decreed to be a backward and unfashionable Catholic practice and the word ‘tawdry’ took on a new derogatory meaning which remains to this day.
This is a Catholic church, in fact it is the oldest one in England. Upstairs lining the walls and in the windows are memorials to English Catholic martyrs.
Let me introduce you to two of the martyrs. They were both made into Saints in 1970. They provide some interesting links to Shakespeare who may himself have been a secret Catholic, and thus technically a traitor.
This man is Swithun Wells.
His house in Grays Inn Fields very near here was raided in 1591 by the arch priest hunter, Richard Topcliffe, and Swithun was found guilty of harbouring a priest. He was hanged outside his own front door. Swithun and Shakespeare knew each other well and shared a patron.
She was hung at Tyburn in 1601. Her crime: allowing a mass to take place in her home. Afterwards her body was secretly taken away and buried by Catholic nobles. Shakespeare is said to have written a poem for this highly illegal ceremony.
Another link with this place and Shakespeare is that John of Gaunt, who was a hugely influential figure in the 14th century, lived here in Ely House for 17 years. He is a character in Shakespeare’s Richard II, and has these immortal lines as his deathbed speech which in the play was delivered here at Ely House. If you are old enough you may remember John Gielgud’s TV portrayal of this role 40 years ago, along with Derek Jacobi as Richard II.
The lines seem to paint an idyllic picture of the condition of England. But Shakespeare had subtle ways of expressing his dissatisfaction with the religious intolerance of his times. John of Gaunt later in the same speech goes on to lament the state of the country.
It was clear to Shakespeare’s contemporaries that the play was a direct critique of Elizabethan England and the play, or parts of it, were banned.
Let me tell you more about John of Gaunt who lived two centuries before Shakespeare.
He was Duke of Lancaster, son of one king and father of another, and the richest nobleman in England owning no fewer than thirty castles, as well as tenancy of this place. As the founding father of the house of Lancaster he was in effect the Tywin Lannister of his era, and they do look alike. Tywin I admit is more likely to be modelled on a later Lancastrian: Warwick the Kingmaker.
After John of Gaunt’s death he was apparently laid out in this very crypt awaiting burial in St Paul’s Cathedral across the Fleet River from here, where an elaborate tomb was made for him and his wife.
Why can’t we see this tomb at St Paul’s today? Because old St Pauls along with John of Gaunt’s tomb was burned down three centuries later in the Great Fire of London of 1666.
You can see how the fire started in Pudding Lane shown here, and fanned by the wind, swept westwards across London. But the wind changed just before it reached where we are now - marked in green dot - and St Etheldreda’s was saved.
After the fire, you could have walked for 30 minutes from here down Holborn and then Cheapside to the Tower and seen nothing but charred ruins. It destroyed virtually the whole city within the old walls, which are marked on this map, as are the seven gates.
Forgive me the indulgence of all this history. Many of us at Spence Johnson are historians, it is a very good training for what we do. So you will not be surprised to know that Institutional Money in Motion has a history.
Two Spence Johnson directors as well as team members were active in European institutional research in the 1990s and 2000s, me with Sector Analysis, and Philip Robinson and Tabitha Rendall with Watson Wyatt’s Global Asset Study.
In 1998 my firm Sector Analysis set up European Investor Focus, a 900 interview per year research initiative operating from Berlin, and this research has continued every year since, although I no longer have any involvement with it. It is now called Fund Buyer Focus.
Here is an example institutional output from EIF 2003 when I was then running, which estimated the value of mandates across Europe shown here in a heat map. Green is for the highest numbers and red the lowest.
Nigel will be bringing some of these numbers up to date later tonight.
Institutional Money in Motion has deep roots. But what you will see revealed from today was in reality born at the red dot marked 1 here in 2011, coincidentally like the Great Fire of London not far from Pudding Lane.
By 2011 Nigel Birch had already set in place ground breaking work in measuring and describing the Fiduciary Management market in Europe. Nils Johnson and I asked him to predict the next big research need among institutional asset managers.
Nigel went away to have 25 conversations, and came back with his conclusion to us at the London Capital Club. His discovery was that someone needed to collect European institutional mandate and fund data from asset managers to create measures of asset flows, intermediary influence and the changes in institutional investors’ behaviour.
I can remember that 2011 conversation vividly. We were very excited by the thought that we could once again bring to bear our long-established European research skills.
But realism soon kicked in. We were only a team of four at that stage, it would have been mad to think we could do this task justice. So we put this project on the back burner.
We never lost the dream however.
In the following 2 years we moved to our current offices shown as 2 here on a street called London Wall – and you can clearly see here why our street gets its name - by Moorgate. By 2013 we had doubled in size.
Then one day in 2013 while sitting in a restaurant at point 3 on our map, a client told us of the urgent need for someone to collect - yes you have guessed it - institutional mandate and fund data from asset managers. They called it measuring ‘institutional money in motion’.
This time we were big enough to bear the responsibility of this huge task. We now even had a name for this work, and we jumped into action.
Other clients followed quickly behind in recommending us to take up this challenge.
This evening we sit at point 4 on our map in this historic place. In coming days you will see the results of the hard work done by Nigel, Will and many others within what is now a 15 strong Spence Johnson team, to bring this badly needed initiative to life.
Like the great fire of London our European initiative has in its genesis swept across London, but not quite on the same route, and not this time I hope leaving devastation behind.
History, you could say, is on our side.
The particular client who first inspired us to take the leap is here tonight, but so also are some of the 40 other clients who have supported Institutional Money in Motion along the way. We owe you all a great debt for your faith in our ability, skills and resources.
Thank you for this support and for coming, and I very much hope you enjoy the rest of what we have for you this evening.