Square Mile Investment Consulting and Research has removed its ‘A’ rating of the £358m Liontrust UK Equity fund, following the news that co-managers Chris Field and James de Uphaugh (pictured) are due to retire.
On Tuesday (3 October), it was announced that de Uphaugh and Field, who have both managed the fund since 2003 when it was still housed at Majedie, will be retiring in November this year, and February next year, respectively.
Imran Sattar, who also moved across from Majedie following Liontrust’s acquisition in 2020, has been a co-manager on the portfolio since 2019. From 10 November this year, however, he will become sole manager of the mandate.
Analysts at Square Mile consider this change to be “material”.
“[We] viewed this a ‘core’ offering and one which seeks to remain competitive across a range of market conditions,” they stated in the firm’s latest ratings round-up, published today (4 October). “As such, the combination of three portfolio managers formed an attractive blended style of management which [we] believe will be lost with this restructuring.
“Square Mile acknowledges that Mr Sattar is an experienced and capable portfolio manager, but his appointment as sole manager fundamentally changes the nature and potential investor outcome of this fund.”
In contrast, the team has chosen only to suspend Fidelity Multi-Asset Income’s ‘A’ rating, following the announcement of lead manager Eugene Philalithis’s retirement in March next year. It was confirmed last week that Fidelity has hired Jupiter Asset Management’s Talib Sheikh to take over as lead manager, and Quaestio Capital Management’s Mario Baronci to also work on the £824m fund.
“While acknowledging the continuity that co-managers George Efstathopoulos and Becky Qin and the broader multi-asset team bring to the strategy, they believe it is prudent to assess how the strategy evolves under the leadership of incoming manager Talib Sheikh,” analysts said. “Square Mile will provide further updates following meetings with Mr Sheikh and his team.”
Elsewhere, Square Mile has decided to keep hold of the Axa Framlington Global Sustainable Managed fund’s ‘A’ rating, despite the fact Mark Healy has left the firm.
Analysts explained that Healy, who joined Axa in 2018, was “jointly responsible” for the fund’s fixed income allocation alongside Nick Hayes, who is still at the company, and that the portfolio has a “structurally low exposure” to fixed income assets.
“Jamie Forbes-Wilson and David Shaw also remain named managers for the strategy,” they added. “[We] therefore do not believe there will be any significant impact on the fund following Mr Healy’s departure.”
New ratings and upgrades
Four funds were awarded their inaugural place in Square Mile’s Academy of Funds in the latest rebalance: the BlackRock MyMap range received a ‘recommended’ rating for its “clear risk objectives” and low costs; Nick Clay’s TM Redwheel Global Equity Income received an ‘A’ rating for its strong returns and “simple philosophy”; Lindsell Train’s North American Equity fund was awarded ‘Positive Prospect’ for its concentrated, high-quality approach to stock selection; and Lord Abbett Climate Focused Bond fund was awarded a ‘Responsible Positive Prospect’ rating.
Meanwhile, LF Havelock Global Select was upgraded from ‘positive prospect’ to an ‘A’ rating for its strong five-year total returns and consistent outperformance of its MSCI Enhanced Value index.
CT UK Social Bond fund was also upgraded from a ‘responsible positive prospect’ rating to a ‘responsible A rating’, with the Square Mile team acknowledging manager Tammy Tang’s strong management skills, having taken over the reins from long-standing manager Simon Bond in 2022.
