Frenetic year for funds as market sees 360 changes
More than 360 manager moves or fund changes took place during 2009, according to advisory firm Independent Financial Solutions (IFS).
While more than 100 funds were launched last year, almost twice as many were closed or merged away, the company said.
In addition, more than 60 high-profile managers changed jobs, largely as a result of industry consolidation and fund groups streamlining their operations to cut costs.
Corporate activity, including mergers between Henderson and New Star, Aberdeen and Credit Suisse, GLG and SGAM, Insight and Scottish Widows Investment Partnership were among the main headline-grabbers, with BlackRock’s acquisition of Barclays Global Investors completing in the final quarter of 2009.
The number of fund manager moves, such as Jeremy Lang and William Pattisson resigning from Liontrust and Guy de Blonay returning to Jupiter from Henderson New Star, was not atypical.
However the moves, Mr Lang and Mr Pattisson aside, tended to be dictated by mergers and acquisitions, rather than self-directed.
With such increased activity, it was more important than ever that advisers kept up communications with investors, IFS said.
Jon Foster, partner at IFS, said: “That’s around 360 changes advisers needed to monitor and make a decision about and then communicate the news to their clients.
“This is on top of the usual asset allocation and fund changes an adviser would make through the course of a year.
“If they were really unlucky, they could have spent all year simply writing to clients about fund switches.”
He pointed out that, the bigger the fund affected by a manager move, the more work there would be for advisers.
He said this forced advisers to make a decision and communicate the issue with clients, citing Gartmore’s hiring of John Bennett and his team from Gam to join its European equity division as a key move that would force advisers to contact clients.
On launches, Mr Foster noted most of the activity focused on absolute return products, with several new vehicles introduced by traditional retail investment houses, as well as from hedge fund players seeking to attract retail assets.
“The absolute return vehicles create even more advice issues than a typical fund launch,” he said.
“The portfolios in this space are each created differently, feature performance fees and utilise techniques typically employed by hedge fund managers, causing advisers to be even more diligent in the selection of these portfolios.”
