Multi-manager David Coombs has sold out of Ignis’s £3.9bn Absolute Return Government Bond fund after the departure of key members of its team.
Standard Life Investments (SLI) announced yesterday it had handed control of the fund to Ignis chief investment officer Chris Fellingham after head of rates Russ Oxley, who had been at Ignis since 2004, and Adam Purzitsky and Paul Shanta would be leaving the combined firm.
It was announced this morning by Old Mutual Global Investors that Mr Oxley and five members of his team would join the group next year to launch an absolute return fixed income team.
David Coombs, head of multi-asset at Rathbone Unit Trust Management, said he had taken what he considered an “unusual” step in selling immediately after the departure of a manager.
“We sold yesterday morning,” Mr Coombs said.
“When SLI came in for Ignis we had concerns about whether the rates team would stay together and how it would fit into the SLI business, given the Global Absolute Return Strategies (Gars) team.”
The manager said he had been “assured the rates team would be managed at arm’s length” and gave the company the “benefit of the doubt”.
“The team I invested with is not there any more and so frankly I cannot keep that investment,” he said.
“Normally I do not pull the trigger like this but in this case it feels appropriate. It is not always my first reaction to sell and I normally wait to see who the replacement is.”
The manager added if he could avoid selling a fund he would, because it would incur trading costs.
But he added given the Ignis fund was very different to many other funds the fact original members of its team had left was an issue for him.
“The investment I did my due diligence on is no longer there,” he said.
“If I was a big fan of Gars I might take a different view but we are not holders of that fund.”
A spokesperson for SLI said: “Investors continue to recognise the unique characteristics of this fund, which has a strong long term track record.
“While inevitably there will be short term fluctuations, as long term investors we believe this fund has an important role to play in a diversified portfolio. We remain committed to providing strong performance and high levels of client service.”
It added the intellectual property which supports the fund, the process, and the Ignis risk team, which supervises the fund, “remains unchanged”.
The group added Jonathan Gibbs and Adam Skerry, who will help run the fund were from its inflation team and will assume additional responsibilities for the fund.
“Their combined expertise in inflation products will be a highly-valuable addition to the team,” the spokesperson said. “They are not Gars team members.”
