New Star has today announced a reorganisation of its fund management operations after a year of abysmal performance and manager departures on several of its funds. Stephen Whittaker, the firm’s co-CIO and manager of New Star UK Growth has stepped down, handing the fund over to Trevor Green who joined New Star earlier this year. Whittaker joined New Star with a solid record amassed at Invesco but has struggled mightily during the recent market meltdown. New Star UK Growth has also been removed from Skandia’s Best Ideas range and has been replaced with Tim Steer’s
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fund. Other changes include the merger of New Star Monthly Income with New Star Managed Distribution, New Star Hidden Value into New Star UK Alpha and New Star European Leaders into New Star European Value. You can read more about the changes here.
PIMCO Launches Global Multi Alpha Fund
Pacific Investment Management Co (PIMCO), the world’s largest fixed-income manager, has launched a Global Multi-Alpha fund. The UCITS III offering will be team managed and boasts co-CIO Mohamed El-Erian as lead fund manager. Two other managers on the team are Vineer Bhansali, managing director and head of portfolio management analytics, and Curtis Mewbourne, managing director and generalist portfolio manager. The managers will make use of PIMCO’s cutting-edge global macroeconomic research and invest the multi-asset fund in a mix of equities and fixed-income securities, with no pre-determined asset class weightings. The team may also tap into commodities and property, although indirectly. PIMCO has over $185 billion in assets under management and runs the world’s largest bond fund, PIMCO Total Return. The fund has had an exceptional track record over its lifespan, and has so far delivered a 22% return in Sterling terms this year, 7.5 percentage points ahead of its average peer in the Morningstar Dollar Diversified Bond category.
HSBC Adds New Head to Emerging Markets Desk
HSBC Global Asset Management has appointed Sylvia Coutinho to head the firm’s emerging markets desk, replacing Christian Deseglise. Coutinho will maintain her responsibility as regional head of the firm’s asset management division in Latin America. The composition of the emerging markets equities team remains the same, with Nick Timberlake as head and lead manager on HSBC Global Emerging Market Portfolio and HSBC BRIC fund. The firm’s emerging-markets fund lineup has had a tough 2008. HSBC GIF Global Emerging Markets Equity has shed 47.7% of its value, trailing its average rival in the Morningstar Emerging Markets Equity category by 4.6 percentage points. HSBC GIF BRIC Markets Equity fund has also struggled this year. The fund is 48% deep in losses, that is 5.7 percentage points behind its average Morningstar category peer.
Further Portfolio Manager Switches at Skandia
Skandia Investment Group has changed the manager line-up for its Global Best Ideas and UK Best Ideas funds. The firm was clear about the reason behind the changes: "These changes are a result of the managers being replaced not delivering in line with Skandia’s expectations."
Stephen Whittaker (who has now left New Star) has been replaced in both funds by Tim Steer, also from New Star. AEGON Asset Management’s Audrey Ryan will now run slice of UK Best Ideas, and Schroder's Richard Buxton has been handed a portion of Global Best Ideas(he already runs part of UK Best Ideas). Ashley Willing and Simon King of Gartmore have been dropped, but Ben Wallace continues to represent the firm at UK Strategic Best Ideas, where he will now take sole management responsibility.
Skandia has also replaced Schroders with M&G on the group’s fixed-income portfolios, Skandia UK Fixed Interest Blend and Skandia UK Fixed Interest Bond fund. The switch to Richard Woolnough’s M&G Optimal Income fund was triggered by the departure of Bob Michele from Schroders, former manager of the Schroder Strategic Bond fund. Michele ran the fund between September 2003 and August 2008 and during his tenure managed to deliver 5.3% in annualised returns, that is an outperformance of 2 percentage points per year over its average rival in the Morningstar Sterling Diversified Bond category. Woolnough boasts a similarly solid, albeit shorter track record at M&G Optimal Income . Between December 2006 and October 2008 the fund lost 3.1% compared with an average loss in the Morningstar Sterling High Yield Bond category of 10.2%.
Redemptions Force Asset Managers to Cut Staff
Fidelity International is expected to slash 1,500 jobs company-wide at the beginning of 2009, of which 300 will affect UK staff. The firm is believed to have suffered notable outflows in the last year as investors’ confidence in the equity markets has deteriorated and risk aversion is amplified amidst the current market turmoil. Local press reports also indicate that Gartmore, Rathbones and Threadneedle are amongst other asset managers expected to make cuts.
