Legal & General’s head of high alpha fixed income Richard Hodges is to leave the group, Investment Adviser can reveal.
Martin Reeves will take over management of the group’s £2bn Dynamic Bond fund run by Mr Hodges.
The UK institutional credit team headed by Robert Barnard-Smith will run the Fixed Interest, Managed Monthly Income and Sterling Income funds which Mr Hodges was interim manager on after bond manager Michel Canoy left the group in January.
Mr Hodges’s forthcoming departure will be a blow to the group as he is the second fixed income manager to leave in 2014. He is set to leave the group in October 2014 during which time he will work with Mr Reeves and Mr Barnard-Smith to hand over management of the funds.
Mr Hodges has been at the company since 2007 having joined from Gartmore Investment Management where he was a senior investment manager and head of Pan European portfolios for fixed income between 1998 and 2006.
In 2013, Legal & General Investment Management’s head of asset allocation David North left the company after 12 years.
Mr North, who was also head of global high yield bonds, ran the High Income and Global Macro Themes funds before going on extended sick leave in April 2011.
In five years, Mr Hodges has produced a second quartile return of 67.3 per cent with his Dynamic Bond fund compared to the sector’s 64 per cent, according to data from FE Analytics.
Darius McDermott, managing director of Chelsea Financial Services, said Mr Hodges’s resignation was a “real blow” for the group.
“The fixed income team is well-resourced, but Richard was the stand-out manager,” he said.
“The fund has been one of our favourites in the sector for a number of years and Richard’s total return mentality was particularly attractive to bond investors who, in the current environment, are keen to preserve capital as interest rates rise.
“We’ve downgraded the fund to a hold with immediate effect. It will be interesting to see who snaps up Richard – I’m sure he won’t be short of offers. If he then goes on to manage a similar fund, we will no doubt support him in his new venture.”
Roger Bartley, head of fixed income at LGIM, said: “Martin brings a huge wealth of experience to the lead management of the Dynamic Bond Trust, a fund that he knows exceptionally well.
“We are of course saddened to see Richard leave after seven years at LGIM and he carries our very best wishes for success in the future.
“The Dynamic Bond Trust is a highly regarded fund backed up by a substantial and experienced team.”
