InvestmentsJun 30 2014

Swip active equities team departs

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Earlier this month Aberdeen revealed its equity teams were set to take on the Scottish Widows Investment Partnership (Swip) active equity products and that many of the Swip managers were facing the axe.

Investment Adviser can now confirm that 13 members of the Swip global equities team have left the business. These include Iain Fulton and Stephen Corr, who co-managed the Swip Global fund, and Gregor Macdonald and Andrew Paisley, who co-managed the Swip UK Smaller Companies fund. Other managers axed include James Kinghorn, Greig Bryson and Karolina Noculak.

Katie Wearmouth, who co-managed the Swip European fund, went on maternity leave in May, but the other members of the global equities team have now left the firm. The Swip global equities team were managing £2.9bn of assets across global, European, UK and US funds at the time of Swip’s acquisition.

A spokesperson for Aberdeen said that the firm “will rationalise and consolidate some of the funds”. Investment Adviser understands most of the funds formerly managed by the Swip team will be merged with corresponding Aberdeen funds.

The Aberdeen Global Equity team, headed up by Stephen Docherty, has taken on the management of the Swip Global and Swip Financial funds. The team already runs a global equity product, the Aberdeen World Equity fund.

The Aberdeen Pan-European Equity team, led by Jeremy Whitley, has taken on the Swip European and three UK equity funds, Swip UK Income, Swip UK Smaller Companies and Swip UK Opportunities fund. The team already runs a European, UK equity income, UK equity and UK smaller companies fund.

The Swip North American fund will now be managed by Paul Atkinson’s Aberdeen North American Equity team on the same strategy as the Aberdeen North American Equity fund.

Out of the six Swip funds that have corresponding Aberdeen funds, three had actually outperformed their Aberdeen counterparts in the past three years, according to FE Analytics, while two have outperformed in the past five years.

Elsewhere, the management of the Swip UK Flexible Strategy fund has been moved to the Aberdeen Solutions unit, which is now led by Archie Struthers, previously managing director of investment solutions at Swip.

The manager of the fund, Tony Foster, has been kept on by Aberdeen, but his deputy manager, Mark Phillips, and analyst Ivan Kralj have left the firm.

The departure of the Swip global equities team comes after Aberdeen had already axed several top directors at Swip in its attempt to align the two firms’ investment divisions.

The end of a troubled team

Swip’s active equity funds have long been looked upon negatively by the industry, frequently finding their way into lists of poorly performing funds, such as Bestinvest’s Spot the Dog report or Chelsea Financial Services’ RedZone.

Back in 2012, the firm enacted a sweeping overhaul of its equities business, axing many of its managers and converting much of its assets to quantitatively driven strategies and passive funds.

Swip attempted to rebuild the image of its active equities unit under the management of former BlackRock veteran Will Low, who was brought in as director of equities in 2011.

Performance on some funds, notably the Swip Global and Swip North American, improved, but the UK funds still lagged, which Mr Low put down to the disruption from switching assets to the quantitative strategies, and the division retained its poor reputation.

When Aberdeen announced its own teams would be managing the funds, Jason Hollands, managing director of business development and communications at Bestinvest, said the move “should be welcomed by investors”. He explained: “Swip has struggled in the active equity space. While it made radical changes to its equities business, moving to a global approach, the changes came too late to salvage the perception that it was a weak player.”

The teams that will now be running the Swip funds

Pan-European Equity team

Head: Jeremy Whitley

The Pan-European team runs Aberdeen’s UK and European equity funds, as well as some specialist products, such as the Aberdeen Property Share fund. Jeremy Whitley was appointed as head of the team in July 2009, having previously been a senior investment manager on the global equity team. He oversees a team of 16 investment managers, based in Edinburgh, Paris and London.

Global Equity team

Head: Stephen Docherty

The Global Equity team runs a range of funds and mandates, from conventional global equity funds to global equity income, ethical equities, technology equities and even a commodity equities fund. Stephen Docherty has been with Aberdeen for 20 years, having spent two years at Abbey National, and he now heads up a team of 15 managers, including five senior investment managers.

North American Equity team

Head: Paul Atkinson

The team currently runs one open-ended pooled strategy, the Aberdeen North American Equity fund, available in both onshore and offshore formats. The team also manages the North American Income Trust. Paul Atkinson joined Aberdeen in 1998 and was originally responsible for specialist global equity funds. He joined the US equity team as senior investment manager in 2005 before rising to head up the team.