Following the announcement that star manager Richard Hodges is to step down as manager of the £2bn Legal and General Dynamic Bond Trust, some multi-managers and advisers have been looking for alternatives to the fund in the run up to the end of his tenure in October.
At the end of April, FTAdviser sister publication Investment Adviser reported that Legal and General Investments’ commitment to active management has been questioned by multi-managers and advisers after Mr Hodges announced he is quitting the group.
Martin Reeves is co-managing the fund with Mr Hodges and is due to run the fund solely from Autumn.
Despite the firm announcing in April that Mr Reeves and Mr Hodges would work closely to transition the fund, and that the pair are already said to work closely on fund strategy and stock selection, some managers have expressed concerns over the change in hands.
Shauna Bevan, collectives investment manager at Charles Stanley, told FTAdviser: “We sold out of the fund shortly after Dickie Hodges’ departure in our own managed fund service.
“We sold it at the beginning of May on platforms. We had a 7 per cent weighting to the L&G Dynamic Bond in some of our strategies.”
Ms Bevan cited Reeves’ experience as the main reason for selling out of the fund.
She said: “The Dynamic Bond Trust has a lot of different parts and did not feel he had enough depth of experience in managing the strategic bond portfolio. He has a strong track record as a high yield manager but not in running a strategic bond fund with as many different parts.”
James Davison, consultant at IFG Financial Services said it was “reviewing that fund for possible alternatives” as a result of him Mr Hodges leaving.
He added: “People will have bought this fund because of him. Other people will definitely be reviewing it.”
Mr Davison said the firm may move into the Jupiter Strategic Bond Fund as a viable alternative.
Andrew Alexander, head of investments and product strategy at Three Counties said: “If it was me I’d be having some serious conversations about the capability of who was taking over.
“If I was holding it I’d have some serious conversations as to what was happening and on the look to probably move.”
Mike Deverell, partner and investment manager at Equilibrium said: “We don’t use the fund but it’s always been on the radar. We probably would have sold when Dickie Hodges left.”
A spokesperson from L&G defended Mr Reeves, stating he “has had a lot of experience in fixed income markets outside high yield”, citing in particular his background as European head of fixed income and head of credit research at Alliance Bernstein.
He added: “LGIM has a 70 strong fixed income team, which follows a similar idea generation process across the suite... in conjunction with subject matter experts Martin decides on the optimal asset allocation and the portfolio is constructed accordingly.”
