InvestmentsOct 20 2014

SLI suffers outflows as team exits

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ByBradley Gerrard and Matthew Jeynes

Several major multi-managers have dumped their holdings in Ignis’s Absolute Return Government Bond fund after the bulk of the team behind it defected to rival Old Mutual Global Investors (OMGI).

In a blow to Standard Life Investments (SLI), which bought Ignis earlier this year, head of rates Russ Oxley and five members of his team are set to join OMGI next year to launch a suite of absolute return fixed income funds.

At the time of the purchase, SLI said the fund was “complementary” to its suite of absolute return products, including the giant £21.6bn Global Absolute Return Strategies (Gars) fund.

But the departure of key members of the team has prompted several major multi-managers to remove holdings from their funds.

Architas chief investment officer Caspar Rock said the change in management was a “fundamental change to the way the fund is operated”.

“The departures covered the day-to-day trading, ClearCurve analysis, full portfolio construction, positioning and marketing,” Mr Rock said.

“Although these processes will remain in place, the individuals in this case were fundamental to the operation of the fund.”

Ignis chief investment officer Chris Fellingham has taken the fund on alongside SLI’s Jonathan Gibbs and Adam Skerry – but Mr Rock said the last two had joined from the inflation team “rather than having a strict absolute return investing background”.

“While it is unusual for us to react straight away following the departure of a manager, overall it is very hard to justify remaining invested in a fund that has undergone such significant change and the immediate or imminent removal of a number of key individuals,” he added.

David Coombs, head of multi-asset at Rathbone Unit Trust Management, said that selling straight after a manager’s departure was an “unusual” step for him.

“When SLI came in for Ignis, we had concerns about whether the rates team would stay together and how it would fit into the SLI business, given the Gars team,” Mr Coombs said.

He said he had given the company the “benefit of the doubt” after being “assured the rates team would be managed at arm’s length”.

“The team I invested with is not there any more and so, frankly, I cannot keep that investment,” he added.

Aberdeen Asset Management’s multi-manager team also held the fund – but Graham Duce, director of multi-asset, said his team had sold too.

Whitechurch Securities’ managing director Gavin Haynes said he would maintain his position, but would “monitor the fund closely”.