It has been a busy month. The news that an EU referendum would be held on June 23 sparked turbulence on both the stock market and, more significantly, on the currency markets. Uncertainty around the ‘Brexit’ vote pushed sterling down to its lowest level against the dollar since the start of the financial crisis.
Elsewhere, the investment news this month was focused on exits, rather than Brexits. There were a number of high profile fund manager moves – the biggest of which was Katherine Garrett-Cox’s departure from Alliance Trust after a turbulent 12 months. These moves have prompted some fund groups to launch new funds, or rebrand old funds. Investors may want to look again at the opportunities these changes present.
Garrett-Cox to Leave Alliance Trust
After a bruising year-long battle with activist investors, Katherine Garrett-Cox, one of the city’s most high profile women, announced she will be leaving Alliance Trust in March.
She has been running the fund management arm, after being forced off the board of the investment trust in October. But this role has now been made redundant as part of the latest restructuring.
These changes have been brought about by shareholders Elliot Advisers, who started agitating for change last March. They stated they wanted the investment company to reduce costs and improve shareholder value.
Garrett-Cox joined Alliance Trust in 2007 and became chief executive in 2008. Her high profile earned her the nicknamed “Katherine the Great” She as paid £1.4 million by Alliance Trust last year. The company said her current role will be split between other senior employees.
Richards to Move to Key M&G Role
Garrett-Cox wasn’t the only high profile women on the move this month. The Prudential has persuaded Anne Richards, currently chief investment officer at Aberdeen Asset Management, to take over as chief executive of M&G Investments when Michael McLintock, the current incumbent, retires later this year.
The role is regarded as one of the biggest in the fund management industry with M&G Investments having more than £247 billion funds under management.
Marwood to Leave Axa IM
Richard Marwood is leaving AXA Investment Management and will join Royal London Asset Management as a senior fund manager.
Marwood has been with AXA for 20 years and was the lead manager on range of distribution funds - including the £934 million Distribution Fund, the £33 million Defensive Distribution and £181 million Ethical Distribution portfolios.
Marwood hasn’t been given a fund portfolio to run at RLAM but the company said he will be working closely with the equity team, including Martin Cholwill, manager of the firm’s £1.7 billion Equity Income fund.
Axa IM has promoted Jamie Forbes-Wilson, William Howard and Matthew Huddart to co-manage the five strong equity and bond range alongside Jim Stride - who will oversee the range as a whole.
Change of Name - and Face - at Artemis
Artemis UK Growth became Artemis UK Select this month, to reflect the style of new manager Ed Legget. Legget – who joined Artemis from Standard Life Investments in June last year – took over the reins of this fund from retiring manager Tim Steer at the start of this year.
The name change reflects the more contrarian approach adopted by Legget, as opposed to Steer’s ‘growth’ outlook.
New Pidcock Fund
Jupiter Fund Management has announced it will launch a new Asian Income for manager Jason Pidcock. The fund will launch on March 2, but the fixed offer period has now started.
Pidcock who joined the company in May last year, previously ran the highly regarded £4.4 billion Asian Income fund for Newton Investment Management, a role he held for over a decade.
The new fund will hold a narrower range of holdings, but a more ‘flexible’ mandate according to Pidcock. It will target a yield 20% higher than the FTSE All World Asia Pacific ex Japan Total return index. This is the same benchmark used by the Newton fund – although this fund aimed to deliver a yield 35% above this index. In a recent interview with Morningstar Pidcock said he would be targeting stocks in the tourism, healthcare and property sectors.
Moody Outlook
While the political talk has been of a possible Brexit, ratings agency Moody’s issued a fresh warning this could result in a downgrading of the UK’s credit rating.
The agency has said that the economic costs of leaving the EU would outweigh potential benefits and said it would consider “reflecting those threats to the UK’s credit standing by assigning a negative outlook to the sovereign’s Aa1 rating following a vote to exit.”
Kathrin Muehlbronner, a senior vice president at Moody’s, says: “We consider it positive that the referendum will take place as soon as June, as a lengthy period of uncertainty on the part of firms and investors would damage the UK’s economic growth prospects.”
Other ratings agencies have also voiced concerned about a possible Brexit. In December Standard & Poor’s said it was keeping its outlook for Britain’s rating at negative, while Fitch said a UK vote to leave the EU would be “moderately negative” S&P said: “In a worst-case scenario, a Brexit could also harm the sterling’s role as a global reserve currency, removing what has been a significant support for our AAA rating on the UK since the start of the global financial crisis.”
