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Skeoch feels that they are now back on track and executing their
long-term strategy to build a successful and sustainable AM
business.

• Delivering a return to external shareholders.
• Taking people on a journey and giving them the confidence
to make the steps.

However, SLI is now financially viable as a stand alone company
and provides one-third of the cash returned to Standard Life
shareholders.

The firm conducts in-house research to make its investments,
entailing investing in the public equity, fixed income, and real
estate markets across the globe.

Potentially of greater significance is the growth of new pension
fund management business that SLI has attracted from outside
Standard Life. In 1999, third-party funds were £6bn and by 2007
they stood at close to £47.7bn the vast majority sourced from UK
clients - the remainder coming from overseas.

The investment process of SLI combines asset allocation, stock
selection, portfolio construction, risk management and dealing. It is
research intensive, and is built around the company’s ‘Focus on
Change’ philosophy. Effectively this is the early identification and
understanding of changes in the key drivers affecting markets and
market prices; and the factors likely to cause a shift in the
investment environment.

“On occasion, such as in 2000 and 2006, we've been
so successful that we've even had to pull up the
drawbridge and refuse new business because to take
on more would have compromised our ability to obtain
alpha."
Keith Skeoch

For Skeoch ‘alpha’ is simply the return over and above that of the
market. However, in order to help fund managers achieve ‘alpha’
SLI invested in computer software called the ‘Matrix’ which
generates investment ideas that may not be immediately obvious.
If successful in spotting the triggers of market change then it can