Page 18 -

plan although as Skeoch points out “there were a number of
distractions along the way.”

Skeoch quotes Crombie as saying:

“Performance is the No 1 job”

In the early years there was a dominant strategy – investment
performance was needed to make a mark as a fund manager but it
was also important for the capital of the mutual company.

Although no one really believed a life company could build an AM
firm. By 2003 the fundamentals were falling into place: the culture
rd
was changing and 3 party business was increasing.

In 2004 Keith Skeoch was appointed Chief Executive of SLI after
Sandy Crombie took up his post as Group Chief Executive of the
parent company.

To some extent SLI was seen as the “advance guard” of what was
required for a successful demutualisation and IPO. Financial
performance became as important as investment performance.

There were therefore two jobs: performance and profit

“Profit is a promise of the future.
Invest in people, technology and bonuses.
Profit was needed to keep what had been built.”

“When the market falls, fees have to drop. Costs need
to be managed and SLI needed to stand independently
and to do that it had to generate. They had to avoid
going ‘cap in hand’ to a struggling parent to fund a
growing business. ”

All of this was done against the background of selling equities.
This was “quite stressful” as the balance sheet solvency of the
whole company depended on it.

However, in selling equities and buying bonds for SL the
Investments arm was doing the opposite to what it was doing for
its other clients.