Toward the end of a tirelessly long, quiet Thursday afternoon, Kames dropped a mega bombshell by announcing that Milburn and Roberts would be departing, sending the industry, understandably, into a bit of a frenzy.
The plot thickened Friday morning when the relatively pint-sized Liontrust told shareholders that the famed fixed income duo was set to join the firm in 2018 and would be launching a trio of bond funds.
Commentators overwhelmingly deemed it a major win for Liontrust, with the likes of Tilney Group’s Jason Hollands calling the hire a “real coup” for the group and James Calder, research director at City Asset Management, declaring it “the best deal that Liontrust has done in its career”.
“Liontrust has been a fantastic business for the last five years or so,” says Darius McDermott, managing director of Chelsea Financial Services.
“They’re just totally on the up and up and David and Phil are further evidence of that.”
While the impact on Liontrust’s business was uniformly positive, it was harder to assess the size of the hole left in Kames’ fixed income unit, minus co-heads Milburn and Roberts.
The question is, will Kames survive the departure of two of its biggest bond managers?
Hargreaves Lansdown research director Mark Dampier thinks so, pointing out Liontrust’s own successful resurrection after the exit of heavyweights Jeremey Lang and William Pattison in 2010.
News of Lang’s departure, who many saw as synonymous with the Liontrust brand and the reason for the business’s early successes, caused the fund group’s share price to plunge to its lowest level since entering the FTSE All-Share.
Within one week of the announcement, Liontrust’s share price had fallen 34% to 80p per share.
Not long ago, they were still being singled out as likely takeover target by some industry commentators.
But now, with shares valued at £4.80p per share, total assets under management around £9.25bn and the acquisition of Alliance Trust Investments under its belt, you can appreciate “just how far Liontrust has come,” says Dampier and recognise “they have become a serious player”.
“They have really almost come back from the dead,” continues Dampier.
“I won’t say they almost went bust, but you haven’t got to go a terribly long way back to see how much they were struggling when Jeremy Lang left, although they still had Anthony Cross there, who is a top man.”
