Opinion  

Earth-shattering 2013 presents chance to lay new foundations

John Kenchington

Just in case we were in any doubt, the decision of Jupiter chief Edward Bonham Carter to step aside last week confirmed 2013’s status as the year of earth-shattering fund management exits.

In March, we revealed that Schroders’ UK equity perma-bull Richard Buxton had quit. Fidelity giant Anthony Bolton was next, calling time on his leadership of his Chinese investment trust in June. In July, we announced that the king of top-down microeconomic investing, Jupiter’s Philip Gibbs, was heading for retirement.

Then came the big one. On October 15, Invesco Perpetual was forced to announce that its once-in-a-generation fund management colossus, UK equity fund manager Neil Woodford, had quit to launch his own venture. This was followed by M&G’s Global Basics fund manager Graham French quitting the £4.2bn fund in November.

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So, when I heard last week that Mr Bonham Carter – who pioneered Jupiter’s stockmarket flotation and characterised its posh-but-pragmatic image – was moving to a lesser role, I was hardly surprised.

Some have gone as far as to hail the death of the fund manager because of all this. I don’t agree. After all, Mr Buxton and Mr Woodford have joined or plan to launch new fund managers, and I wouldn’t be surprised if the rest do the same.

If we’ve seen anything this year, it has been the death of a generation of fund management leaders.

They were the ‘big bang’ City boys, who suffered the pain of the Lehman Brothers bust and have probably been praying for an opportunity to get out for years. In 2013, the FTSE 100 index flirted with all-time highs, bonuses approached pre-crisis levels and incentive plans matured, so what better time to cash out?

It’s a changing of the guard, and the next generation of fund management leaders can define what kind of industry they want it to be. Global rather than domestic, transparent and accountable, client-focused, risk-aware – these qualities will define the industry.

But there’s more. Our colleagues at the FT’s fund management magazine FTfm recently unearthed startling evidence of sexism in the industry. The reaction at senior levels has been to dismiss or ridicule the findings.

However, the fund houses that succeed in future will be those that adapt to remain relevant to the needs of their clients. There is an opportunity for firms to make women as well as men the fund management giants of tomorrow, or else we could well be looking at the death of the fund manager.

Out with the ‘boy’s club’, in with the new.

John Kenchington is editor of Investment Adviser