BlackRock has leapt to the defence of its underperforming UK active equities division following a year of upheaval and outflows from its funds.
Last year saw a number of managers leave BlackRock amid a substantial overhaul of its UK equities team, which was exacerbated at the start of 2014 by the decision of star manager Richard Plackett to take a six-month sabbatical.
But Tony Stenning, head of UK retail at BlackRock, insisted the division was beginning to turn things around and that the changes made in 2013 would see performance improve and assets return to the funds.
With the exception of Mr Plackett’s top-quartile BlackRock UK Special Situations fund, the main retail UK funds have struggled for many years.
The BlackRock UK Income fund is in the bottom quartile of the IMA UK Equity Income sector for one-, three- and five-year periods to April 14, according to FE Analytics, while the BlackRock UK Smaller Companies fund is in the bottom quartile of its sector for one and three years, and third quartile in five years.
Both the BlackRock UK fund and the BlackRock UK Absolute Alpha fund are in the bottom quartile of their respective sectors in three and five years, and in the third quartile for one-year performance.
The performance issues have also led to significant outflows from those funds, with FE Analytics data showing that the UK Income fund, in particular, has suffered an estimated £320m of outflows in the past year.
However, Mr Stenning claimed that changes on each of those funds had already begun to bear fruit.
He said: “There were some changes needed to address certain issues. We had been looking at what we needed to do with the range, so the changes in 2013 were not a coincidence.”
He said that since Mark Wharrier had been hired to work alongside Adam Avigdori on the UK Income fund in November 2013, replacing Nick McCleod-Clark who took long-term sick leave, performance had picked up and the fund was ahead of its benchmark.
The addition of Nigel Ridge to the UK Absolute Alpha fund a year ago had stemmed the performance slide on the fund, Mr Stenning added. He also claimed Nick Little was turning around the BlackRock UK fund, after the underperforming BlackRock UK Dynamic fund was merged into it last year.
