OMGI confirms fund merger and staff exits

Old Mutual Global Investors has ditched its absolute return fixed income desk as the firm’s management buyout looms, losing five staff and merging two funds due to the changes.

Mark Nash, manager of the proposed Jupiter Global Macro Bond Fund

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The firm has decided to merge the Old Mutual Absolute Return Government Bond fund into the Old Mutual Strategic Absolute Return Bond fund after a strategic review of its absolute return fixed income business.

Following the merger, co-heads of Old Mutual Absolute Return Government Bond fund Adam Purzitsky and Paul Shanta, will depart, along with three other team members.

The merger is due to take place on 27 July, subject to shareholder approval.

Huw Davies and analyst Vytaute Maciulskyte, the remaining members of the absolute return bond team, will be re-housed in other desks at OMGI. Davies will join the wider fixed income team, while Maciulskyte will work as an analyst on the Old Mutual Systematic Positive Skew fund.

The fixed income team stands at 10-people strong, including five fund managers.

The firm’s head of credit Mark Nash (pictured) is co-manager on the Strategic Absolute Return Bond fund, which Purzitsky’s and Shanta’s fund will merge with.

Fixed income commitment 

In May, OMGI boss Richard Buxton denied the firm had shifted away from fixed income ahead of the single strategy spin-out, despite a spate of staff exits and lacklustre performance.

OMGI’s fixed income team has undergone a series of major changes and revisions within the last year, starting with the departure of former fixed income head Christine Johnson, who exited after restructuring the desk into three separate teams.

The team was then restructured again under Nash, reverting back to a single entity. This move saw heads of credit and emerging market debt Tim Barker and John Peta depart.

Speaking to Portfolio Adviser in an exclusive interview, Buxton stressed the team is “fully committed to supporting this desk”.

“It is small in AUM by fixed income standards, but from the moment we recruited Mark, we were fully committed to supporting and building and growing the fixed income side of the business, even in an environment where the bond bull market is over and yields will be rising from here,” Buxton said.

The team currently oversees £1.7bn in assets under management.

Simplified proposition

OMGI has said that investors in the Absolute Return Government Bond fund will benefit from the Strategic Absolute Return Bond fund’s more diversified approach and enjoy lower annual management fees and performance fees.

The Old Mutual Absolute Return Government Bond fund has £746m assets under management as of 8 June. Nash’s fund, which he co-manages with Nick Wall, is much smaller in size, standing at £75m at 31 May.

Warren Tonkinson, managing director at OMGI said the changes were designed to “simplify our proposition” and were “aligned with our ambition to offer a market-leading fund range”.

“We believe the proposal to merge the Old Mutual Absolute Return Government Bond Fund into the Old Mutual Strategic Absolute Return Bond Fund is in the best interest of investors who are seeking to achieve a positive total return, while benefiting from exposure to a more diversified investment strategy and lower fees. We are confident that following this change, our fund range will be well aligned with investor demand.

“We are grateful for the contribution the absolute return government bond team has made to the business and wish them the best of luck for the future.”

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