OpinionNov 16 2015

Stewart Investors’ drip-fed news is a muddled message

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A high-profile fund manager change often divides opinion, and last week’s news from Stewart Investors (formerly First State Stewart) was no different.

For every investor who was ‘very relaxed’ about Angus Tulloch and Jonathan Asante’s decisions to step back from their main funds in 2016, there was another who found it ‘unsettling’.

The proof will be in the performance, and the pair’s respective successors certainly have a hard act to follow.

Nonetheless, I can’t but help agree with the fund selector who quietly acknowledged to Investment Adviser that the nature of the announcement was “odd”.

Manager changes of such significance are always going to catch the industry off guard, and perhaps put a few noses out of joint.

There are many pieces to this puzzle – from the surprise of Mr Asante moving back, to the shift of Asia Pacific Leaders to a sustainable mandate.

But what’s most notable is how quickly it’s followed First State’s decision to hive off Stewart Investors from its Asian counterpart this summer.

Unavoidable or not, this wasn’t the best way to communicate long-term thinking. Dan Jones

It’s a bit of a damned if you do, damned if you don’t situation – announcing the moves at the same time as a split of the business would have been a lot for investors to take on board.

The stilted way in which the firm has ended up informing clients, however, feels even more unsatisfying.

Stewart said it wasn’t possible to have made the announcements at the same time. This doesn’t quite sit right either.

The firm said succession planning had been taking place for some time, which makes perfect sense. Yet it also said that no firm decisions had been made as of July 1, the date at which Stewart Investors was formed.

What, then, has changed over the past four months? The move was supposedly about the development of the team, rather than individual decisions, but the brief time between the two statements looks a lot like the result of idiosyncratic thinking.

Why does this matter? There’s plenty to admire about Stewart Investors – not just its fund performance.

Splitting its business in order to ensure the “burden of scale” doesn’t have an undue impact is, on the face of it, a refreshingly different way to run an investment business.

But in relating this and last week’s changes it has ended up drip-feeding information to investors.

Unavoidable or not, it’s not the best way to communicate long-term thinking.

Dan Jones is editor of Investment Adviser