Following a period of consultation with clients and regulators RLAM has taken the decision to change the way it manages some of its equity assets.
The firm’s Japanese and Far Eastern equity portfolios will be switched from active to passive management, leading to the departure of Edward Chan and Jonathan McClure.
Power of passive
McClure is a senior fund manager for RLAM Japanese equities and runs the Royal London Japan Growth Fund. He joined the company in 2001 when it took over United Assurance and has specialised in Japanese equities throughout his career.
The £300m fund is top quartile over five years, with a return of 13.77% over the period, but drops down to second quartile over three years, with returns of 8.83% slightly lagging the sector, and third quartile over one year, with returns of 2.76% again below the sector average.
Meanwhile, Edward Chan leaves RLAM following 17 years with the firm after starting his career managing Far Eastern funds at Foreign & Colonial Emerging Markets. His £487m Royal London Far East Fund is ranked second quartile over five years having returned 26.34% compared with 21.17% from the sector average.
Over three- and one-year timeframes the fund is in the third quartile, lagging the sector average in both instances.
Both funds will transfer to RLAM’s existing passive equity team, which runs US, UK All Share and FTSE 350 trackers already.
More casualties to come?
A spokesperson for RLAM said: “As a result of these changes, we are currently in discussions with Jane Coffey regarding how this will impact her.”
Coffey is head of equities at the company having re-joined in 2002 after stints at Morley Fund Management and SLC Asset Management where she headed up European equities. She oversees the whole equities team and runs the Royal London UK Equity Fund.
Her £379m fund has underperformed the sector and benchmark across one, three and five years and is either third or fourth quartile across each of these timeframes (as at 31 December).
Royal London has been calling around its clients to update them on the situation and one of them was able to tell Portfolio Adviser that Jane Coffey was also due to leave the company.
RLAM said it remains fully committed to the active management of equities in those areas it believes it can best add value for clients and have a competitive advantage, European equities for example.
Continuation of a trend
Last year fellow Scottish asset manager SWIP underwent a severe equity restructure which saw the firm cut 23 investment roles.
It shifted some of its strategies into a quantitative-based approach and also said at the time that it remained committed to active fund management in those markets it was confident it could “generate strong investment performance and build long-term, valuable relationships with clients”.
Henderson has also announced an equity business shake-up in recent weeks. For more information, click here.
