Multi-managers left in the cold

In the bull market from 2003 to 2007, fund houses couldn’t get enough of multi-managers. At major investment firms, merry-go-rounds ensued as employers tried to poach the best talent. But as markets and regulation grew ever more complex, many IFAs started to outsource the job of picking managers to run their clients’ investments. Multi-manager funds seemed to be an obvious solution.

After the bear market of 2008 and 2009, however, multi-managers embarked on a period of consolidation. IFAs favoured outfits that had already proven themselves – with the likes of Cazenove, Henderson, Jupiter, Thames River and Threadneedle in the lead. It became difficult for rivals to gain ground.

In many cases, however, multi-managers who left as a result of consolidation in the industry were able to find attractive jobs. First, Ignis dissolved its multi-manager joint venture Maia Capital – but the partners in the venture quickly found senior roles, most notably Chris Ralph, who became chief investment officer at St James’s Place. Then F&C and Thames River merged and rationalised their multi-manager operations – but F&C’s head of multi-manager Dean Cheeseman subsequently moved to Mercer. Henderson and Gartmore pulled off a similar trick – but the top multi-managers who left Henderson, Mark Harris and Craig Heron, soon found work at Eden and Railpen respectively.

There remains, however, a clutch of multi-managers that have left major asset management firms, but haven’t as yet bagged another job in-house. Paul Kim and Richard Timberlake left FundQuest and joined LV= Asset Management last year, only for LV= to hand the management of the business to Threadneedle. Jake Moeller left Alico Wealth Management after a corporate shake-up. Mike Pinggera, ex-head of multi-asset at former Hbos asset manager Insight, Richard Philbin, ex-chief investment officer at Axa Wealth’s multi-manager arm Architas, Jason Britton, ex-chief investment officer at fund-of-funds specialist T Bailey, and Lothar Mentel, ex-chief investment officer at Octopus Investments, have all yet to announce a move to a permanent in-house role – although Mr Britton and Mr Mentel have started consultancies.

From a fund group’s perspective, all of the managers above have a personal brand in the lucrative market for outsourced investments. Is the market really so saturated that asset managers can’t offer any of these seven senior jobs, or find a profitable role for them that would entice them away from consulting? Discretionary fund managers have become the “next big thing” in the world of outsourced investment – surely a number of them would leap at the chance to hire a name in the advisory world?

However, although the opportunities may be there for them, advisers shouldn’t bet on all these names pitching to them anytime soon. Gartmore multi-manager veteran Bambos Hambi was one of the earliest to leave his employer – just after the start of the bear market in 2008. It wasn’t until 2011, after a lengthy period as a consultant, that he took up a permanent in-house role.

Nick Rice is editor of Investment Adviser