Nick Clay’s departure from BNY Mellon Investment Management during the coronavirus sell-off creates an “uphill battle” for the asset management giant.
On Thursday, the fund group confirmed Clay (pictured) would be leaving the business after 20 years, taking a trio of professionals from his global equity income team, including co-manager Andrew Mackirdy, with him. BNY Mellon did not say which firm the foursome would be joining.
Newton named newcomer Ilga Haulbert as Clay’s replacement on the £5.2bn BNY Mellon Global Income fund. Haulbert, who only joined as head of equity opportunities from Deka Investments last November, has also been appointed as Newton’s head of equity income.
Clay was also the manager on BNY Mellon’s £1.4bn Global Equity Income fund and £23.4m Sustainable Global Equity Income fund and co-manager on the £88m Emerging Income fund.
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‘Hard enough dealing with outflows without having to deal with unprecedented market environment’
Clay’s exit blindsided many in the industry who described the move as a big blow to Newton, one of BNY Mellon IM’s boutique firms.
“It’s a tough one for them. There’s no doubt about it.” said Chelsea Financial Services managing director Darius McDermott.
Clay’s Global Income is the BNY Mellon IM fund Chelsea had most exposure to, McDermott said. “James Harris left about five years ago. Nick Clay, who was the alternate manager on the strategy took over and did an equally good job. So, it is a blow.”
Fundcalibre has revoked its elite rating for BNY Mellon Global Income with immediate effect.
Losing a team instead of one manager is “obviously a blow for the company”, said Fundcalibre research director Juliet Schooling Latter.
Schooling Latter said that though Clay’s successor Haubelt has a lot of experience, dealing with a handover during the coronavirus crisis adds another layer of complexity.
“It could be a bit of an uphill battle,” she said. “It’s hard enough dealing with possible outflows, without having to deal with an unprecedented market environment at the same time.”
Investors unlikely to switch funds amid coronavirus volatility
But Fairview Investing investment consultant Ben Yearsley thought coronavirus uncertainty meant the four departures probably wouldn’t have a massive short-term impact.
“Not many will be doing fund switches in the short term as markets are too volatile,” Yearsley said, “so this might give the new manager time to bed in.”
“The disruption caused by the departure of Clay is going to be fairly insignificant compared to the disruption we are seeing generally,” agreed Willis Owen head of personal investing Adrian Lowcock, adding that Clay will be with the firm for another six months which is “plenty of time” to hand over to Haubelt.
BNY never had a star manager approach
Lowcock pointed out that although Haubelt is less well-known than her predecessor she will have support from “a strong and experienced team” consisting of Paul Flood, Jon Bell and Robert Hay.
Flood and Bell have experience working on BNY Mellon’s Multi-Asset Income and Global Income mandates respectively. Bell has been with the team 20-plus years while Flood and Hay have been there nearly two decades.
“BNY has never been one to promote the star manager approach, so while Nick Clay has a high profile that is as much to do with the success of the team’s approach as anything,” Lowcock said. “Whilst the timing is unfortunate, it is a reminder that business, and life, carries on.”
Clay’s BNY Global Income fund is in the second quartile of the IA Global Equity Income sector on a one and three year-view and top quartile over five years. It has outperformed the sector average during the coronavirus sell-off, down 19.7% compared with the average -22.2%.
