Exclusive: Causeway acquires Levendi in defined return fund push

Structured products specialist investment firm Causeway Securities has acquired Levendi Investment Management, the independent structured products investment advisory boutique behind one of the most successful funds of structured products in the UK - the Levendi Thornbridge Defined Return Fund.

This strategic move marks a significant development for Causeway Securities Ltd, which received a private equity investment from Westbridge last year that has stimulated ambitious growth plans across different markets and product types.

In today’s volatile market environment, we see growing demand for investment solutions that offer more predictable outcomes - Conor O'Donnell

“While we pursued various organic and strategic opportunities, one area that was lagging was assets under management (AuM) on our defined growth funds,” Conor O’Donnell (pictured), CEO of Causeway Securities, told SRP.

“As we looked to address this, we looked for potential organic or strategic opportunities and identified Levendi as a perfect business to partner due to its reputation, size, track record and people.”

As a fairly new player, it was a challenge for Causeway to manage both AuM-based and subscription/distribution business lines.

“We were almost victims of our own success with structured product execution and distribution, which made it harder to focus on AuM growth,” he said. “Bringing Levendi’s infrastructure, track record and AUM into the business will provide the perfect platform to re-engage with existing clients and attract new ones to both the Levendi and Causeway funds. The plan is to run both types of products in parallel, leveraging the strengths of each.”

After a few meetings, conversations developed from there, leading to the partnership and acquisition. Causeway Securities now offers to financial advisers two Ucits regulated defined return fund solutions.

“In today’s volatile market environment, we see growing demand for investment solutions that offer more predictable outcomes and help reduce overall portfolio volatility,” O’Donnell said. “This acquisition not only strengthens our capabilities with a significant increase in assets under management but also brings in a talented team that will further enhance our differentiated approach.”

New phase

Following the acquisition, there will be no changes to the Levendi Defined Return Fund management team.

According to Frank Copplestone (below right), CEO of Levendi Investment Management, “combining Levendi’s fund management discipline with Causeway’s operational excellence and distributional scale is a fantastic strategic fit”.

There is scope to grow the fund in continental Europe, and we already have clients in South Africa and Switzerland - Frank Copplestone

“The fund’s success with clients is based on delivering performance as promised,” said Copplestone.

“The Levendi fund is very rules-based and has a disciplined management style, strictly adhering to its mandate and using metrics for all product selection and management.”

Despite headwinds like Brexit, Covid and the Russian invasion of Ukraine, the fund has grown to over £130 million in AuM.

“The next phase was to attract more institutional clients, either organically or by partnering with a strong distribution group, which could bring greater reach, operational efficiencies and respected management,” said Copplestone.

The fund’s model is principally UK-focused due to the distribution strategies of Levendi and most competitors in this space.

However, as long as regulatory and distribution requirements are met, the model could be successful outside the UK.

“There is scope to grow the fund in continental Europe, and we already have clients in South Africa and Switzerland,” Copplestone said. “The US market is different due to regulatory reasons and launching there would likely require a locally domiciled platform, but there is still potential as the market evolves.”

O’Donnell also believes there is scope to expand the fund’s reach beyond the UK market as its features (collateralised, professionally managed, diversified) should resonate in other markets.

“We think the fund will help us with our plans to expand into South Africa, Singapore, UAE and the EU, leveraging existing licenses and registrations,” he said. “The Ucits structure is the “gold standard” for retail funds globally, and this should lower some of the barriers to distribution outside the UK.

“The main challenge for us is to “spread the word” and export the fund’s success to new markets.”

The funds

Levendi Thornbridge Defined Return Fund

Levendi’s fund comprises of a diversified portfolio of defined return investments linked to major market equity indices. It aims to maximise the chance of generating an average medium-term annual return of six percent above GBP deposit rates.

Against a backdrop of UK, European and US equities falling rising 4.24%, 0.31% and 2.17%, respectively, the fund increased 0.79% in July.

One product worth £6m in notional autocalled during the month. Buffers were further improved with a 49.5% average buffer to capital preservation – the buffer on the worst performing product is 45.7%. The same buffer for receiving the target return is 39.2% on average and 33.5% on the worst performing product.

The fund is fully exposed to worst-of autocalls of which 50.9% is linked to the FTSE 100/S&P 500; 39.6% is linked to the S&P 500/Eurostoxx 50; and 9.5% is linked to FTSE 100/Eurostoxx 50.

Some 93.1% of the fund’s products are autocalling at current market levels.

Levendi Thornbridge Defined Return Fund has £135.4m (US$182m) AuM as of 31 July 2025. The fund was launched on 31 January 2018 and has a minimum subscription of £5m for institutional investors (B-Class) and £1,000 for retail investors (A-Class).

Causeway Defined Growth Fund

This Dublin registered fund (Ucits V) offers actively managed exposure to a portfolio of autocallable structured products linked to major equity indices. The products are backed by G7 government bonds, reducing counterparty bank risk.

The fund closed July 2.07% higher relative to June. Its cumulative performance for 2025 YTD is 20.31%. Since its launch in February 2020, it has provided an annual return of 8.05%.

The current portfolio comprises 10 step-down autocalls that pay an average coupon of 10.48% pa. The average distance above the final autocall barrier is 20.50%. If the product reaches the final observation date, the coupons are triggered if the underlying indices are above 80%, 75%, or in some cases, 65% of their initial level.

Some 38 instruments have already matured, averaging a coupon of 9.62% pa.

Causeway Securities Defined Growth Fund has US$15.9m in AuM as of 31 July 2025. The fund was launched on 4 February 2020, and the minimum subscription is US$1,000. Key investor information risk and reward profile: six out of seven.