Andrei Kiselev (pictured) left Baillie Gifford on 29 March 2018, six days after the launch of the US Growth trust. The asset manager did not issue a press statement or regulatory filing announcing Kiselev’s exit.
Several investors Portfolio Adviser spoke to questioned Baillie Gifford’s silence on the departure, noting they would normally expect an announcement to be filed via a regulatory news service (RNS).
Baillie Gifford refused to comment on why it did not issue an announcement.
Regarding Kiselev’s exit, the Scotland-based asset manager said Gary Robinson and Helen Xiong will remain as named managers on the Baillie Gifford US Growth trust.
Poor communication
7IM senior investment manager Simon Moore told Portfolio Adviser it is normal practice for investment trusts to issue a regulatory filing when a named manager departs.
Architas investment director Adrian Lowcock said RNS filings are required for material changes and the board had clearly decided Kiselev’s exit did not fall in that category.
But Lowcock believed Baillie Gifford should have communicated the untimely exit regardless.
“In terms of client communications and communications to investors it would have been better to just get out there and announce it and have dealt with it cleanly,” he said.
The London Stock Exchange requires issuers to provide information that is “correct, complete and not misleading”, according to its admissions and disclosure standards.
The FCA states companies must ensure information is not “misleading, false or deceptive and does not omit anything likely to affect the import of the information” in its Disclosure Guidance and Transparency Rules sourcebook.
Odd timing
Lowcock said it was unusual Kiselev left just after the investment trust launched.
“That’s the sort of thing you get locked down well in advance of launching the fund,” he said.
In the lead up to the investment trust launch, Baillie Gifford touted the fact the investment trust was its first launch of a closed-ended product in 30 years.
Moore said Kiselev was clearly identified as deputy manager of the investment trust when 7IM met with lead manager Robinson at the test marketing stage in January.
He said it is rare for anyone to leave the partnership.
Experienced team
Chelsea Financial Services managing director Darius McDermott said he is not particularly concerned about Kiselev’s exit, stating Baillie Gifford has a big US franchise.
“It’s important to note that he wasn’t the lead manager on the fund – that is Gary Robinson. And the other deputy manager, Helen Xiong, has a lot of experience too, so while I’m sure he’s a loss to Baillie Gifford, there is still a very strong team in place,” McDermott said.
Lowcock agreed there was a lot of talent in Baillie Gifford’s US equity team.
However, Moore said the trust is not one of 7IM’s recommended funds. Instead, they like Scottish Mortgage Investment Trust and Japanese Smaller Companies from the Baillie Gifford stable.
