One well-respected multi-manager I spoke to recently said his most crucial question upon meeting a team working on a fund is who has the ultimate power to decide if the group disagrees on an investment idea.
So some people still value the certainty provided by a lead fund manager and like to know that when it comes to the crunch the line of command is clear.
On the other side of the piece are those who like to eliminate ‘key man risk’ by making sure a number of people could step into the breach if something prevented the lead manager from coming into work.
Schroders is the latest group to gravitate towards a team-based approach, albeit only within its fixed income department.
To this end some portfolio switches were announced yesterday, which saw the lead managers change on a number of funds.
Manager changes
More specifically, Schroders’ head of global macro within the fixed income team, Bob Jolly, and senior portfolio manager, Gareth Isaac, have been named managers of the Schroder ISF Global Inflation Linked Bond Fund and Absolute Return Bond Fund.
Both of these used to be managed by Frederick Bourgoin and Bhupinder Bahra, with former head of UK and European rates David Scammell, who has now left the firm, also previously working on the Inflation Linked Bond Fund.
Meanwhile, Scammell’s other funds have been handed over to upcoming talent Thomas Sartain and Jamie Fairest, who have worked at Schroders for more than six years each.
Manu George, head of fixed income project management EMEA, said naming managers on funds is for the most part a formality.
“Over the past three or four years we have been moving towards a team-based approach. But with certain clients you need to be able to state who is responsible for pulling the trigger.
In the case of Jolly and Isaac, leader and depute of the team global multi-sector team, it made sense to appoint them managers of the Global Inflation Linked Bond Fund. Sartain and Fairest are deemed to have specialist skills that make them best suited as named managers on the Schroders Gilt & Fixed Income Fund and Schroder ISF Euro Liquidity Fund respectively.
Who is responsible?
There is no formal requirement from the IMA to have lead managers appointed on retail funds, but fund rating agencies such as Morningstar and Lipper place some onus on it.
“Ideally we would not want to put portfolio manager’s names on funds as our style of management is moving towards a team-based structure.
“Each team member has a speciality and strength we want to maximise to be able to offer a globally integrated platform of best ideas. I want clients to buy the fixed income philosophy and ideas, but it is a retail requirement to name a manager,” George concluded.
Schroders assured me that although Bahra and Bourgoin are no longer named managers on any funds they are still involved with the strategies via their contribution to the team and their specialism in quants-based analysis.
Do you think there is too much emphasis on ‘star’ fund managers in the retail world? What is your experience of team-run funds? Let us know in the comments box below…
