Standard Life Investments, the fund investment arm of the UK insurer that floated this year, can point to a wealth of new business from its flagship UK equities team as proof of success in this asset class.

Helped by good recent performance, it brought in more than £2bn (€3bn) in UK equity assets in the year to June 30, winning mandates from 13 segregated clients and more than 20 pooled investors. UK equities accounts for about £30bn, or 25%, of assets under management. Wins came from local authorities, including Staffordshire, Buckinghamshire and Cheshire, and from multi-manager products controlled by Russell Investment Group and Barclays Bank. Taking over management of Deutsche Equity Income Trust helped bring the number of segregated UK equity accounts to 45. David Cumming, head of UK equity, has built a rigorous systems-based infrastructure that combines fund manager insights from company executive meetings with data from quantitative tools. Standard Life Investments scrutinises the FTSE All-Share universe for indications that a company's share price is about to rise or fall. Stephen Acheson, head of UK business, said Standard Life had built a system that could identify these cues, weigh them against market expectations, incorporate them into valuation tools and translate the resulting ideas into portfolios. Simon McCallum runs the data-crunching quant tools, which require constant testing and upgrading. His team uses predictive factors to feed into the system to anticipate a change in share prices including earnings momentum, dividend growth and price-to-earnings ratios. Acheson said: "We test to see if these factors are important and either we downgrade or upgrade them." The company used to believe directors' share dealings were an important indicator of future performance. Although it continues to analyse directors' dealing of small-cap stock it stopped looking at it routinely for large-cap stocks about 18 months ago, convinced many directors of bigger companies buy and sell shares because of contractual obligations or even for publicity reasons, and not because of convictions about how a company is set to perform. Standard Life Investments' UK equities team has 18 investment staff and three analysts. It signalled its commitment to winning third-party business with the appointment of Aegon Asset Management's Louise Kay to head the team responsible for direct sales to UK local authorities and companies. The bulk of Standard Life Investments' assets come from its parent, however last year it broke into the top 20 of UK-based managers, based on external assets.