Invesco’s incoming co-head of fixed income Thomas Moore has promised continuity for investors once Paul Read and Paul Causer retire but has outlined some of the areas the Henley team could expand into under his and Michael Matthews leadership.
It was announced in June that Moore (pictured) would lead the business along with Matthews once Causer and Read leave at the end of the year after 26 years of working together.
Heading a fixed income team is not entirely new to Moore, who joined Invesco five years ago from Morgan Stanley where he was head of credit research for Europe and part of the management committee that ran the global credit business.
‘Meeting of minds’
Speaking to Portfolio Adviser, Moore said on arrival at the firm his outlook was “intellectually very compatible” with the Henley team. “So, from the get-go, it seemed as if, at least in terms of our approach to investment, there was a meeting of minds.”
He said even then it was clear succession planning was on the two Pauls’ minds, not only in terms of who would lead the team when they stepped back, but also in building a team that was “sufficiently robust”.
“They were some years away from retirement still but definitely thinking about it [succession]. That gave me comfort I would be joining something that would be sustainable.”
Maintain team-driven approach
He said despite the investment prowess of Causer and Read, the investment process at Henley is very much team driven which means investors should not expect a great deal of change under his and Matthews’ leadership.
“Thinking about the future, we can say with some confidence that there’s going to be continuity of approach and continuity of, I hope, results.”
Moore also said the team-centric approach meant that client response to the announcement had been “pleasantly positive”.
“When speaking to clients, post the announcement, there’s been a hugely supportive tone to those conversations, and I think it’s down to the fact that the team has been in place for a long time.”
Moore said fund flows, “where the rubber meets the road in terms of how people are voting”, have been positive every week since the announcement.
“Investors have continued to entrust their money to the team, which you would assume they wouldn’t be doing if they were planning on making some big change down the line,” he added.
Relinquishing some research duties
Moore is a named manager on the Invesco High Yield fund as well as the offshore Pan European High Income fund which he currently co-manages with Read and Causer. He will continue to occupy these positions when he becomes co-head of the team but will drop some of his research duties to free up bandwidth.
“I’m hoping that the time freed up by dropping the research piece will be enough to dedicate to this [co-managing], but I’ve got to say, I’ve been very impressed with the degree to which Invesco has been supportive. There are a lot of systems in place to support the heads of teams who manage money and people.
“That’s not to say that there’s not a decent amount of time devoted to admin, people management and strategic thinking; there certainly is, but it’s not excessive in my experience so far.”
Making his mark on the team
Although he promises continuity, Moore said: “I don’t think that we would be presenting a very compelling case if we didn’t have some ideas of our own.”
One priority is filling out gaps in the research team left as analysts have taken on portfolio management responsibility because of the team changes.
“We probably need to do some backfilling on the analytical side, so hiring is one element of what we’re going to be focused on,” said Moore.
The team recently hired a dedicated ESG analyst to work within the fixed income team and Moore also expects to launch more ESG targeted strategies, some of which are likely to have a climate theme.
Moore said he is also excited about being more “entrepreneurial” about the running of the group and how it can remain relevant to clients in a rapidly changing environment.
He also said while Invesco has traditionally been an index agnostic house, there might be scope to launch “index aware” funds because of client demand.
Also, the team could potentially focus more on structured products and the use of derivatives in products. “It’s something that we could quite happily do, but just coincidentally haven’t yet.”
On working as co-head with Matthews, he said: “He’s someone that I’ve developed a very close relationship with in the time that I’ve been at Invesco, and I think that it is fair to say that we are very complimentary in so far as our skill sets are different, and our personalities are quite different, but in a compatible way. He’s also well over six feet tall, while I’m not the tallest.
“I couldn’t wish for a better partner than Mike in in embarking on this. It’s an exciting, but somewhat daunting, challenge and I’m really glad to be doing it with him.”
