Last week, Investment Adviser revealed that Richard Buxton had resigned from Schroders - the biggest shock to the industry since Jeremy Lang and William Pattisson quite Liontrust.
Mr Buxton’s move to Old Mutual Global Investors is the latest in a raft of manager moves seen in recent years. Manager moves like this, however, are a good indicator of how investment houses are looking to position themselves in the marketplace.
Two years ago the fund manager merry-go-round was focused on multi-manager and multi-asset specialists. Now, however, the hiring patterns appear to favour emerging markets – both debt and equity – as well as property and fixed income.
Fraser Donaldson, insight analyst for funds at Defaqto, says: “It was almost as though each company was setting themselves up for the future and realising that multi-manager was the place to be.”
One of the biggest changes in the multi-asset space was the move by three members of the Standard Life Investments Global Absolute Return Strategies team to Invesco Perpetual in September 2012.
Reflecting the increasing overlap between multi-asset and fixed-interest strategies is Jupiter’s recent appointment of Miles Geldard as head of its combined fixed-interest and multi-asset team.
Fixed-income appointments have been flowing thick and fast in 2012 and into 2013, in spite of concerns the bond bubble may be about to burst, or perhaps because of this. Legal & General Investment Management, Scottish Widows Investment Partnership (Swip), Kames Capital and Liontrust have all strengthened their fixed-income teams.
Property too has become a growing area, with Swip and Kames among those boosting their property teams, with Kames restructuring its property unit following several new arrivals.
Meanwhile, emerging markets continue to be a hotspot for manager moves and developments, with Schroders, Threadneedle, Ignis and Mirabaud among those hiring or creating new teams. The problem with the large amount of manager moves is whether the performance of a fund is based on one manager or a team process.
Professor Andrew Clare, who specialises in asset management at Cass Business School, notes that research has shown when a manager moves it can have a big impact on the performance of a fund.
“When a manager who has been outperforming for a few years prior to leaving then leaves, the performance of that fund [reflects] more or less benchmark-type returns from that point onwards for a couple of years,” he says.
“At the other end of the scale, when a poorly performing manager leaves, if they have underperformed for a couple of years, poor performance doesn’t exactly stop but the deterioration is not quite as rapid.
“But it is quite hard for investors to follow, partly because some managers sell their asset management teams as just that, as teams. Some teams genuinely are teams and the loss of one player might not be quite so significant, while I think other teams are nothing of the kind.”
Ben Willis, head of research and investment manager at Whitechurch Securities, adds that manager changes can provide a headache, especially with roughly 50 per cent of managers not having a three-year track record.
