The retirement of Paul Causer and Paul Read from Invesco’s fixed income team will be a loss to the business but was not unexpected and should not effect the funds given the experience of their successors
The veteran duo are calling time on their 26-year partnership at the end of this year, handing leadership of the firm’s Henley £26bn fixed interest business to Michael Matthews and Thomas Moore.
Causer (pictured) and Read have built the Henley fixed interest team from just three people in 1995 to 28 today, 10 of whom are fund managers, with plans to expand the team this year. The retirement of Causer and Read from 1 January 2022 will be the first in the team’s history.
The duo said the handover had been in the making for more than 10 years and the rest of the year will be spent handing over responsibility to Matthews and Moore to give clients plenty of notice.
“This has been a very big decision for us,” they added. “We are proud of our achievements and enjoy our role and the people we work with. However, we feel that in Michael and Thomas we have two excellent leaders as well as a broad and deep team of people that is ready to take on the full responsibilities to serve our clients and take the team forward for many years to come.”
Causer is a co-manager on 10 Invesco fixed income funds, according to Trustnet, including the Invesco Tactical Bond and Invesco Distribution funds.
In July last year Invesco announced Read was taking a step back from a chunk of his portfolio management duties. Read was dropped as a named manager on the £2.3bn Invesco Monthly Income Plus fund, as well as the £2bn Distribution and £611.9m Tactical Bond funds, all three of which he ran with Causer and Ciaran Mallon.
AJ Bell head of active portfolios Ryan Hughes said the duo’s “well-earned” retirement will be “a loss to the business” but was not unexpected.
He added: “The announcement a year ago that they were stepping back on a number of funds to allow their colleagues to take more of a front foot was a sign that this announcement would come sooner rather than later.”
Reliable and uncontroversial successors
Matthews has worked with Causer and Read for more than 25 years, having joined the team in its infancy. He currently co-manages the Corporate Bond fund with Causer.
Moore joined Invesco five years ago having previously led the European credit research team at Morgan Stanley. He manages the Invesco High Yield fund.
There are no planned changes to the investment philosophy, Invesco said.
GDIM investment manager Tom Sparke said Invesco has taken a sensible step toward continuity in appointing two managers that have been part of the team for a long while.
He added: “Michael Matthews especially, has been part of the fixed income set-up for many years and he provides a reliable and uncontroversial successor for Invesco. I would expect a continuation of the current situation with investors experiencing very little change.”
Hughes described Matthews as “hugely experienced” having worked on the team since 1995, while Moore also has “significant experience” which makes for strong continuity in the approach to the fixed interest funds.
“With a solid and experienced team, there is certainly no need for existing holders of any of the Invesco fixed interest funds to panic and given the well communicated handover, I expect little impact on the funds over time.”
Square Mile suspends rating on two funds
Square Mile has suspended its rating on Invesco Tactical Bond and Invesco Distribution funds, having previously been rated AAA and AA, respectively. It has also reduced the rating on Invesco Corporate Bond from AAA to A, Invesco Sterling Bond from AAA to A, and Invesco Monthly Income Plus from AA to A.
The Square Mile research team said: “For the Invesco Corporate Bond, Invesco Sterling Bond and Invesco Monthly Income Plus funds, the bulk of our conviction has always come from the credit selection capability of the analyst team. We are also very comfortable with Michael Matthews, who has been a named manager on both the Invesco Corporate Bond and Invesco Sterling Bond funds since 2013 and 2006 respectively.
“We feel however that the impact of Paul Causer’s departure is likely to be more heavily felt in those funds where asset allocation is more significant to the way the funds are managed. We have therefore suspended our ratings on the Invesco Tactical Bond and Invesco Distribution funds pending review meetings with the newly announced management teams.”
Morningstar has placed Invesco Global Income under review after it was announced the strategy will be managed by its current comanagers Alexandra Ivanova and Stephen Anness after Causer and Read depart.
Morningstar associate director of manager research Matias Möttölä said: “In August 2020, Alexandra Ivanova was named as the third fixed-income manager at this strategy, while Stephen Anness has managed the global equity income portfolio of this fund since 31 December 2019. Ivanova has been at the company since 2015, but this was her first role as named manager. Anness joined already in 2002.
“In order to better assess the effects of the changes to the running of the strategy and the way the fixed-income team operates going forward, we are putting the fund to under review.”
The RSMR research team said it is “speaking with Invesco about the changes” because it rates four of the fixed income funds from the Invesco stable: Tactical Bond, Global Bond, High Yield and Corporate Bond.
CIO pays tribute
Invesco chief investment officer Stephanie Butcher said: “We are very fortunate to have a fixed interest team as strong as we do in Henley. It is a testament to the leadership of Paul Causer and Paul Read that we are in this position. After 26 years together at Invesco and each with a near 40-year career in finance, their retirement is well deserved.
“In Michael Matthews and Thomas Moore we have an excellent combination of leadership skill and experience. Across the entire team we have a deep pool of talent and I am excited about what they will continue to achieve for our clients.”
