The shock news of the past week has to be the signing of ABN Amro star fund managers Nigel Thomas an...
The shock news of the past week has to be the signing of ABN Amro star fund managers Nigel Thomas and George Luckraft by Framlington.
Known to have been wooed at one time or another by almost every major fund management house in the UK, the move by the two from what is considered to be a small boutique house to another boutique has been doubly surprising.
It has been an era when managers seem to be craving a small, niche house and giving up their large, often head of desk, roles, ie Adrian Frost, Rory Powe, John Sweet, Toby Thompson and Derek Lygo. While ABN Amro is a large global house, in the UK it has always been seen as a small boutique, its business centring around the abilities of Thomas and Luckraft.
The question of culture rears up again but also makes advisers wonder just how secure is any manager at any house? The idea of Luckraft and Thomas leaving ABN Amro is on the same scope in surprise value as it would be if Anthony Bolton were to announce he was leaving Fidelity for another group.
Unfortunately the departure of the two leaves advisers in an unenviable situation. The four funds managed by the two have been among the top sellers this, admittedly dreary, Isa season, boosting ABN Amro into one of the top sellers of the year. In picking up the pieces there are two obvious choices intermediaries have. The first is to hold on and see who ABN Amro finds as replacements. Supporting this decision is the case of those who moved too fast when William Littlewood departed Jupiter ' the performance of Tony Nutt has caused many to regret moving assets.
The other is to leave, either now or when the two take up their new posts sometime over the next 12 months. The two have always been seen as very individual managers and ABN Amro has banked on selling their funds on the fact that investors were buying Luckraft and Thomas, not just a UK income or select opportunities fund.
This was proved when investors left the Thomas-managed Solus Special Opportunities fund last year in droves when ABN Amro launched its own version. So do advisers take the risk of incurring yet another charge in moving assets again to follow Thomas to Framlington ' at the cost of some 300 or 500 basis points?
At the end of the day is the reputation of two managers worth following at any cost or is this starting to come close to churning?
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