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Fund managers should be accountable to IMA ‘spirit’ test
The IMA has confirmed
the new sector names
and definitions for its
Managed and Mixed asset
class sectors which are
identical to those used
by the Association of
British Insurers. From
1 Jan, 2012 there has been
no IMA Cautious Managed,
Balanced Managed or
Active Managed sectors.
Instead, using equity-based
criteria, the new names and
definitions:
� Mixed Investment 0%-
35% Shares
� Mixed Investment 20%-
60% Shares
� Mixed Investment 40%-
85% Shares
� Flexible Investment
PA analysis
In the latest in a number of
attempts to create a definition
of its Managed Sectors
that is useful for all the
various user groups – fund
managers, intermediaries
and Joe Public – the IMA
People moves
l Alan Orchard
Alan Orchard has left
Asset Risk Consultants
after just a few months
with the firm. The highly
respected Orchard joined
ARC in August 2011 as a
consultant with particular
responsibilities as a fund
specialist. Orchard was the
second high-profile
departure from ARC in
2011, after the managing
director of its Jersey
operation, Euan
Dangerfield left in April to
join Cazenove Capital
Management’s private
wealth management team.
l Lothar Mentel
Lothar Mentel has left
Octopus Investments and
will not be replaced in his
role as CIO. After just over
emphasised that funds
should comply with the
‘spirit’ of the definition.
“Funds in the sectors
which do not appear to
comply with the ‘spirit’ of a
definition will be removed
from the sector,” said an
IMA report released at the
end of November. “Funds
will be issued with a
warning before they are
removed. The ‘spirit’ may
be considered as being
whether a fund’s investments
or strategy tends
towards the achievement of
the overall sector scheme
objective of allowing likefor-like
comparisons to be
made between funds.”
If only fund managers in
the Absolute Return sector
could do this and at least
pretend to comply with the
‘spirit’ of providing investors
with a positive return
in any market conditions
on a 12-month basis.
The worst culprit is
the GLG EM Diversified
Alternative Fund which
three years at the firm,
he departed because
he achieved his goal,
according to a statement
from the company. Guy
Myles, the company’s
managing director and
founder, will take on
direct responsibility for
the multi-manager team
in what he termed a
“simplification” of the
business.
l Paul Feeney
Paul Feeney has stepped
up to take on Phil
Wagstaff’s role as chief
executive of Skandia
Investment Group (SIG)
after the latter’s departure
to Henderson Global
Investors. At the end of
October, separate
announcements were
Saunders: clarification
has returned -16.1% in the
past year, with a similar
return over the past six
months. According to its
own fund fact sheet, it
has not given a positive
return since launch in
September 2009.
Given it has consistently
failed its investment mandate
(as an absolute return
fund) and its investors,
there is a very good argument
for it being closed
down and its managers,
Karim Abdel-Motaal and
Bart Turtelboom, allowed
to pursue other interests.
They would not be
made that Wagstaff was to
join as CEO of Skandia
while Feeney was to join
in a similar role within the
asset management
business at Old Mutual
Long Term Savings, SIG’s
parent company. Feeney
will now take on both
roles and bring together
the businesses under Old
Mutual LTS.
l LVAM fixed income team
Friends Life Investments
has recruited the former
LV= Asset Management’s
fixed income team after
Threadneedle effectively
showed the fund managers
the door. FLI is a brand
new asset management
business, a subsidiary of
the Friends Life Group,
which is due to launch
alone. The Polar Capital
UK Absolute Return has
lost 13.3% in the past year
and is down by nearly 3%
over three years; Gavin
Launder’s L&G European
Absolute Return Fund has
returned -10.6%.
If the FSA was allowed
to apply the ‘spirit’ of what
an absolute return fund
should do, there would –
and should – be several
managers, at best, looking
for other strategies to run.
“Managers should note
that the user group for
sectors should be assumed
to be consumers and their
advisers,” the same IMA
report reads.
With this in mind,
maybe the ‘spirit’ should
be used when it comes
to naming absolute return
funds. Something chief
executive of the IMA,
Richard Saunders may well
clarify at the PA Expert
Investor Absolute Returns
Event in London on 1 Feb.
Gary Corcoran
in the second half of
this year. It has recruited
Michael Wright, John
Hampton, Purna Bhudia
and Nigel Bradshaw from
LV= who joined in January
reporting to CIO Mark
Versey.
l Julie Thomas
and Ben Yeoh
First State has bolstered
its global equities team
with the appointment of
two new sector investors,
Julie Thomas and Ben
Yeoh. They will specialise
in financial and healthcare
stocks respectively and
both have already started
their roles. The team
manages a number of
institutional mandates as
well as the First State
Global Opportunities Fund.
Straatman joins
Lombard Odier
Lombard Odier Investment
Managers has appointed
Jan Straatman into
a newly-created CIO
position. Straatman
will start on 1 March
and joins from ING
Investment Management
where he has been global
CIO for the past two
years. He will be based
in London and report to
Hubert Keller, who is
a managing partner.
Legge launches
new business
The former head of
Liontrust has launched a
new fund management
firm that will initially run
long-only propositions
with stocks chosen using
a number-crunching
quants system. Nigel
Legge, co-founder of
Liontrust who quit as its
chief executive in May
2011, is now at the head
of Vinculum, a business
he first announced earlier
this year aiming to bring
a new process to fund
management that would
strip out human error.
Fixed income
ETPs surge
Fixed income ETPs have
surged in number in
the past four years, as
investors increasingly
turn to an indexed
approach for the fixed
income element of their
portfolios. Since 2007,
469 new products have
launched – 110 in the past
year alone – according to
Kevin Feldman, managing
director at BlackRock. Their
growth in popularity as
a way of accessing bond
strategies has seen ETPs
grow to represent 33% of
all new money flowing into
bond strategies in 2011.
This compares to just 11%
of all new money in 2009
and 10% in 2010.
JANUARY 2012 [www.portfolio-adviser.com] PORTFOLIO ADVISER
9
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