SLI Gars could sway advisers with fresh leadership

Gars has seen assets shrivel by £2.7bn over four months

Gars has brought in new blood from Schroders to replace outgoing boss Guy Sterns, a move which commentators have suggested could be a valuable opportunity to sway negative opinion about the strategy.

In a letter to clients seen by Portfolio Adviser CIO Rod Paris confirmed “with a mixture of gratitude and sadness” Stern would be retiring early next year after 35 years as an investor and would be replaced by Aymeric Forest (pictured), Schroders head of multi-asset investments, Europe and head of global income, multi asset.

Stern replaced the architect of Gars and former multi-asset boss Euan Munro when he left to become the chief executive of Aviva Investors in 2013. He has been with ASI for over a decade.

“As a long-standing member of our team Guy has been instrumental in growing Standard Life Investments into a market leading asset manager and, more recently, in helping us to develop and structure Aberdeen Standard Investments,” said Paris. “We thank Guy for his hard work and valuable contribution to the company and wish him the very best in retirement.”

A spokesperson for Schroders confirmed Forest’s departure. “We thank him for his contribution over the last seven years and wish him success in the future,” they said.

Credible replacement for Guy Stern

Darius McDermott managing director at Chelsea Financial Services said Forest taking the lead on Gars was a “positive for both the team and investors”.

“Aymeric is a credible replacement for Guy Stern and we are pleased to hear that there will be a phased and orderly handover,” he said.

Jason Hollands managing director at Tilney said it is difficult to know whether Forest’s leadership will improve performance due to the fact the strategy has “never been reliant on a single trigger-puller” but is rather “an umbrella for a basket of different trades”.

Adviser opinion on Gars could sway

But he said with the personnel change Aberdeen Standard Investments is clearly hoping to sway negative opinion about their multi-billion pound absolute return strategy whose brand has been battered by heavy outflows and lacklustre performance.

Between May and September alone Gars has seen total assets shrink by £2.7bn, falling from £17.9bn to its current £15.2bn.

Returns for the fund remain in negative territory on a six-month, one-year and three-year view.

SLI Gars-3.5%-6.0%-7.2%3.5%
IA Targeted Absolute Return-1.9%-2.2%2.8%9.2%
Source: Trustnet

“Aberdeen Standard Investments will understandably want to see this news flow as an opportunity to recalibrate adviser views on the strategy which has disappointed in recent years, faces more competition from rivals and has experienced outflows,” said Hollands.

“New leadership provides a chance to re-engage with both existing and previous supporters of the strategy.”

McDermott agreed that Gars’ performance in recent years has been “disappointing” and said he hopes to see an improvement with Forest at the helm.

Gars is still the largest fund in the Targeted Absolute Return sector, with nearly £3bn separating it from the next biggest fund Invesco Perpetual Global Targeted Returns.

More Gars restructuring

Stern’s retirement is happening as part of a wider restructuring of the Gars team, Portfolio Adviser understands.

Scott Smith and David Sol have been added as named managers on the Gars mandate, as has Katy Forbes who was promoted to the multi-asset portfolio team internally in August.

Neil Richardson will also exclusively focus on Gars, bringing the total of people working on the team to seven.

Thomas Maxwell and Alistair Veitch, who joined the multi-asset team alongside Forbes this summer, have become named managers on the Absolute Return Global Bond Strategies and Global Focused Strategies and Enhanced Diversification Growth funds respectively.

Paris said in the note to clients that Gars remained committed to improving the results and achieving the performance objectives of its multi-asset funds.

“We believe that the increased resources and idea generation available to the team from across the firm will benefit our portfolio returns as we start to implement an orderly transition in leadership of the team from Guy to Aymeric from February 2019,” he said.

Schroders names Forest replacement

Schroders said that Remi Olu-Pitan will take on Forest’s global multi-asset income responsibilities following his departure.

Ugo Montrucchio, head of multi-asset investments, will oversee Forest’s other portfolios.

Olu-Pitan has been with Schroders since 2006, while Montrucchio has been at the FTSE 100 manager since 2013.

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