Buyers confident Artemis will weather Gosden exit
The £6bn Artemis Income fund should be able to cope with the departure of long-term manager Adrian Gosden, according to fund buyers.
Last week, Investment Adviser revealed that Mr Gosden, who has co-managed the Income fund with Adrian Frost since 2003 and also helps run the company’s £1.1bn High Income product, was to leave the asset manager.
Investment Adviser understands the exit follows a difference of opinion over the division of responsibilities and succession planning on the fund, despite the portfolio having an impressive long-term track record under the pair’s stewardship.
Mr Gosden’s efforts have helped Artemis Income post a 92.8 per cent return over the past 10 years, according to FE Analytics, compared with a 66 per cent return for the IA UK Equity Income sector and a 65 per cent rise in the FTSE All-Share.
Square Mile Investment Consulting and Research suspended its rating on the portfolio following the news, a decision it said was “not taken lightly”. But a number of fund selectors believe the departure of Mr Gosden is unlikely to endanger performance.
Daniel Lockyer, a manager for Hawksmoor, said his views on the product were unchanged due to a belief both in Mr Frost – who has committed to staying with the firm for at least three years – and Artemis’s ability to replace him if needed.
With Artemis Income co-manager Nick Shenton having only worked on the fund since 2014, it is understood the fund house is seeking to recruit a replacement for Mr Gosden.
“Artemis has the clout to replace [Mr Frost] with a high-calibre hire who will take over the fund in three years’ time,” Mr Lockyer said. “It doesn’t change my view on the fund, which is that it is ‘fine’ – nothing spectacular but never going to disappoint either,” he added.
Parmenion investment manager Andrew Gilbert stressed that the Income fund’s “consistently repeatable” process could allay any personnel concerns that may arise.
“[We] sold the majority of our holding in Artemis Income [previously] as part of a broader review of our equity income asset class, but we remain of the view that this is a high-quality fund which is likely to remain a core proposition for many investors,” he said.
“We deliberately look for funds with an investment process that is consistently repeatable. While we are sad to see Adrian Gosden leave, we feel that Adrian Frost’s commitment to stay at least another three years with the support of Nick Shenton should be sufficient to maintain the fund’s attractive risk-adjusted returns.”
Richard Philbin, chief investment officer of Wellian Investment Solutions, said the departure had not caused him to remove his exposure to the fund, although he suggested it could prompt concerns about Mr Frost’s ultimate successor.
“The question it raises is on succession planning,” he said. “If someone who has worked with you for a decade isn’t good enough [to succeed you] and if there’s a reason [Frost] didn’t hand over the reins before, will he be comfortable letting go in three years’ time?”
Fund selectors continue to be spoiled for choice in the UK Equity Income sector, with Mr Gilbert noting that the grouping remained “very competitive” as a result of both established offerings and “up and coming” funds.
Both Mr Gilbert and Seneca’s Peter Elston claimed the move highlighted the growing appeal of a team-based approach.
“The effects of a fund manager’s departure can be negative,” Mr Elston said. “It’s a red flag – unless the fund operates a team approach, so the departure doesn’t cause the disruption that might otherwise happen.”
