Brokers to review SLI Gars ‘buy’ rating after Munro exits

Brokers moved to review their ‘buy’ ratings on Standard Life Investments’ £18bn Global Absolute Return Strategies (Gars) fund following the departure of Euan Munro to Aviva Investors.

As co-founder of the strategy and global head of multi-asset investing and fixed income, Mr Munro was an integral member of the Gars team and Darius McDermott, managing director of Chelsea Financial Services, described his departure as a “blow” for Standard Life Investments.

“It is a big team but Euan built Gars,” said Mr McDermott.

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“It is bad news as that fund has got very big. You can’t dress this up any other way than say that it is a blow.

“We are expecting there will be a conference call but we are probably going to be suspending our buy rating.”

However, Mr McDermott added that Guy Stern had been “a front man on Gars for as long as I can remember”.

Mr Munro has resigned from his role as head of global multi-asset investing and fixed income at SLI in order to join Aviva Investors as chief executive in January 2014.

Mr Stern was head of multi-asset investment at SLI but has been promoted to the role of head of multi-asset and macro investing. He joined the group in 2008.

Losing Mr Munro is a fresh blow for SLI, coming after Invesco Perpetual hired three members of the Gars team, David Millar, Dave Jubb and Richard Batty, in September 2012.

Mark Dampier, head of research at Hargreaves Lansdown, said even though Gars was “not a one man team” he had decided to remove the fund from its Wealth 150 list of favoured products because of the “significant” departure.

The company said Mr Munroe was the “architect” of Gars and head of the team responsible.

“He has been replaced by Guy Stern whom we have met on a number of occasions and believe he is a capable individual with adequate experience to take over from Euan Munro,” Hargreaves said.

“However, Euan Munro’s departure follows that of three other members of the Gars investment team late last year. At that time we were more relaxed about the departures as the individuals involved were less senior and the team remained well-resourced.

“We view the loss of Euan Munro as more significant and feel it prudent to remove the fund from the Wealth 150 while we monitor the fund and the GARS team to see how they cope in his absence.”