M&G announced today (September 17) Mr Dobell would leave M&G at the end of December and Michael Siasny would take over the fund with a “refreshed” investment approach.
The move follows a period of poor performance, with the fund returning 14 per cent over the past 10 years compared to the IA UK All Companies sector’s 80 per cent average.
Mr Dobell joined M&G in 1992 as a UK equity manager on the segregated pension fund desk and took over the M&G Recovery fund in March 2000.
Over his tenure the fund has delivered a 128 per cent cumulative return after fees.
Mr Dobell said: “I’d like to thank M&G for the opportunities it has given me throughout my career. It’s been an immense privilege to manage the M&G Recovery fund, even throughout challenging investment cycles.
“I leave the fund’s investors in the capable hands of Michael Stiasny and I wish them the very best for the future.”
In a move away from its focus on small caps, the fund will also have a new strategy which will see an increased focus on unloved mid-sized companies.
M&G said such companies had contributed most to value creation over the fund’s lifetime.
Ben Yearsley, investment consultant at Fairview Investing, said: “Unfortunately [Tom Dobell’s departure] was inevitable.
“Performance has been poor for a number of years as the style was clearly out of favour and M&G’s move up the market cap scale is not a surprise.”
Mr Yearsley added that he had “always liked Tom” and that it was just “wrong place, wrong time” for him.
The new manager, Mr Stiasny, has worked at M&G for 20 years, heading up the equity research team and managing funds including the UK Income Distribution and Dividend fund.
Jack Daniels, chief investment officer at M&G, thanked Mr Dobell for his dedication, effort and commitment on behalf of customers.
When he first took over the fund, Mr Dobell initially enjoyed a sustained period of outperformance as the dot com bubble burst and value investing, the strategy adopted by Mr Dobell, triumphed as technology stocks crashed.
According to Jason Hollands, managing director of Tilney, the fund became a flagship UK equity product for M&G and was prominent on many adviser buylists and gathered significant assets.
It was once a giant of the fund universe at more than £8bn in size.