The move of Nick Clay and his team from Newton Investment Management to RWC Partners has led fund buyers to highlight the differences between large institutions, like BNY Mellon Investment Management, and smaller boutiques when it comes to investment team autonomy.
RWC announced on Monday is has appointed Clay (pictured) to develop and lead a global equity income investment team which will include Clay’s co-fund manager Andrew MacKirdy and analysts Robert Canepa-Anson and Colin Rutter.
Last week it was announced that Clay was leaving Newton after almost 20 years. He is being replaced on the £5.2bn BNY Mellon Global Income fund by Ilga Haulbert, who has also been appointed as Newton’s head of equity income.
> See also: Nick Clay: Why our defensive fund has outperformed rising markets
RWC said the addition of the team will allow it to offer “additional, complementary income solutions to its clients”.
RWC invests $18bn (£14.5bn) on behalf of its clients. Newton, which has £49.8bn of assets under management (AUM), is part of the multi-boutique model run by BNY Mellon Investment Management, which has $1.8trn (£1.45trn) under management globally.
RWC boss says Clay and team lured by boutique culture
RWC chief executive Dan Mannix alluded to the company’s private ownership structure as a big draw for Clay and the team.
Mannix said: “Although we find ourselves living in extraordinary times, our structure allows us to focus on the longer term. We are a privately-owned organisation which affords us the commitment and stability to continue to develop the services we offer to our clients.
“Nick has highlighted that the way we are structured and operate was a significant component of his decision to join us. We are centred around having strong corporate stability and autonomous investment teams, each of which is highly experienced and deeply trusted.”
‘Can BNY Mellon be described as a boutique?’
Chase de Vere head of portfolio management Ben Willis said remuneration and the chance to “go again” within the boutique set-up at RWC was clearly a decisive factor for Clay and the team.
“One does have to question whether a multi-billion pound fund within a multi-billion dollar US asset management parent company such as at BNY Mellon can really be described as boutique,” he added.
Fairview Investing investment consultant Gavin Haynes said Mannix’s comments are clearly meant to emphasise the benefit of a privately-owned boutique culture over that of the large institution.
He added: “Culture and manager freedom are important considerations when looking for good active funds.”
Current conditions could act as boon for starting new fund
Last week fund selectors told Portfolio Adviser Clay’s departure during the coronavirus sell-off creates an “uphill battle” for the asset management giant.
But Willis said the current market conditions could work in favour of both Clay and Haubert.
He said: “The current situation, as tragic as it is, could prove advantageous for the outgoing team and the replacement manager too, depending on how quickly the RWC fund can be launched, as it could allow them a great starting point in terms of future performance.”
Haynes said: “While the timing is bad for Newton as no-one needs more uncertainty at the current time, it probably works well for the RWC and the managers looking to build a new fund proposition.
“Taking a step back and having a blank sheet of paper to structure a new fund will be beneficial given the huge uncertainty that will continue for some time across global markets and over the ability of companies to pay dividends.”
AJ Bell and Square Mile drop BNY fund’s ratings
AJ Bell has removed the BNY Mellon Global Income fund from its favourite funds list and its managed portfolio service (MPS). The fund has been replaced by Evenlode Global Income in the MPS’s income portfolio and it has added James Harries’ Troy Global Income, as well as Evenlode Global Income, to the favourite funds list.
AJ Bell head of active portfolios Ryan Hughes said the departure of Clay and his team left a “big hole” in the team at BNY Mellon.
“Clay had been associated with the fund for many years, firstly as a deputy manager and then as the lead for the past five years and therefore his departure sees a huge amount of experience walk out of the door,” he said.
Square Mile announced last week it has removed it’s ‘A’ rating on the BNY Mellon Global Income fund.
It said: “Ultimately we feel that Mr Clay is key to the success of this strategy and we feel the most appropriate course of action at this point is to remove the fund’s rating.”
