The impending retirement of Japanese equity vet Stephen Harker from Man GLG deals a blow to the fund group’s Japanese equity franchise at a time when its value-style £1bn strategy is struggling to turn performance around.
Man GLG confirmed on Thursday the lead Japan Core Alpha manager (pictured) would be exiting the business next year, ending a 43-year career in fund management.
Senior portfolio manager Neil Edwards will also be stepping down, the asset manager confirmed, with the pair both leaving the business on 31 March 2021.
Both Harker and Edwards will continue to work as normal for the next six months to ensure an orderly handover.
Following the pair’s departure senior portfolio manager Jeff Atherton will take the reins of the £1.1bn fund. He will be supported by the existing team, which includes Adrian Edwards, Emily Badger and Stephen Harget, who have been recruited over the past six years.
The team will continue to follow Harker’s large-cap contrarian, value-based approach.
Stephen Harker is the face of the strategy
AJ Bell head of active portfolios Ryan Hughes said Harker and Edwards’ departures will deal “a big blow” to Man GLG.
“Given the experience of the two managers, the franchise looks considerably weaker despite bolstering the team in recent years with younger hires and the steady hand of Jeff Atherton,” Hughes said.
Willis Owen head of personal investing Adrian Lowcock said Harker has helped Man GLG build “one of the leading and longest running franchises in the fund management industry”.
Harker first launched the Japan Core Alpha strategy in 2006 at SocGen Asset Management UK, which was acquired by GLG in 2009 before it too was bought by Man Group a year later.
“Stephen is the face of the strategy, and is synonymous with Japanese equity investing, with his focus on long-term reversion to the mean, and a real value bias, instilled in everything the team do,” Lowcock said.
‘No getting away from the fact performance has been weak’
The change in managers also comes at a precarious time for the team when the value-biased fund is in the midst of a performance slump.
Man GLG Japan Core Alpha is currently the worst performer of the IA Japan sector on a one- and three-year view, losing investors 19.1% and 18.7% versus the average fund’s gains of 8.8% and 15.6%, according to data from FE Fundinfo.
“There is no getting away from the fact that performance in the past few years has been weak as their value style has been hugely out of favour and some may have hoped that the managers would remain until there had been a turnaround,” Hughes said.
“However, given events happening around the world at the present time, I’m sure many have given serious thought to the future and it is understandable that both managers have decided to retire.”
Despite the recent performance slump Lowcock points out that the strategy still boasts “an impressive long-term track record”.
Japan Core Alpha has returned 103.2% since Harker first launched the strategy at Soc Gen in January 2006. The IA Japan sector average is 83.8% over the same timeframe.
“There’s no reason to think that can’t continue after Stephen’s exit next year,“ Lowcock said.
Stephen Harker’s replacement ‘well known
Chelsea Financial Services managing director Darius McDermott said the management changeover shouldn’t worry investors and praised Man GLG’s “good succession planning”.
“Jeff is well known to the market and there will be a very orderly and unrushed handover,” McDermott said.
“Both managers are in the mid-60s so the announcement is perhaps no surprise although may well have been brought forward due to recent working from home practices and a general taking stock of our futures.
“Whilst the team is losing a huge amount of experience, nothing will change day to day and the team-based process and philosophy will remain.
Man GLG CEO Teun Johnston thanked Harker and Edwards for “their enormous contributions over the years and wish them all the very best in their well-earned retirements”. “I hope that they will remain good friends of the firm.”
