Nicola horlick has stepped down as CIO, while alan torry says technology market could rally
Nicola Horlick has stepped down as joint chief investment officer of SG Asset Management.
The move comes in the week Alan Torry, head of US equities and technology at SGAM, said he is becoming more optimistic about the prospects of the global technology sector.
With Horlick stepping down as joint CIO to focus on her role as chief executive officer, John Richards has taken over sole responsibility as CIO at SGAM.
Horlick will continue running around £2bn in institutional mandates and the UK Income unit trust, on which she is number two to Adrian Gosden. SGAM UK Income fund has struggled of late against its peers in the S&P UK Equity Income sector.
In the 12 months to 28 October it is ranked 62 of 82 funds with a loss of 20.1% on an offer to bid basis against a sector average loss of 18.4%.
With Richards taking over sole responsibility as CIO, management of the SGAM UK Growth fund, which he took over when Peter Seabrook left the group in March, has been passed to Hugh Sergeant.
Sergeant joined SGAM from UBS Asset Management and has taken over as head of UK equities. His co-manager on the fund is Harinder Sandhu, who also joined from UBS.
Richards said that over one year, equities are poised to outperform bonds by 10%-15%. He also believes the global economy has bottomed out or is close to doing so.
Looking at the markets on a risk/reward basis, Richards said, shows equities are now more attractive than bonds.
The group has been examining its UK processes and the strategy for this will be rolled out later this month, he added.
As part of this, Richards said, between now and next March the group will be looking into the possibility of expanding its UK range with the launch of a Special Situations fund, which will also be run by Sergeant and Sandhu, in addition to their responsibility for SG UK Growth.
Torry believes although the performance of technology companies since the beginning of the year has been poor, as corporate profitability has weakened in the face of a deteriorating global economy, there is now good reason to feel more positive.
Inventories are 20% lower than they were one year ago. Consequently, Torry said, any pick-up in demand will cause a dramatic and immediate pick-up in orders, sales and profits for technology companies.
Torry said: 'Rather than wait for this change, we have made alterations to tech weightings on our funds in anticipation of it.'
However, although the technology sector has been up 20% over the past three weeks, Torry pointed out it is still down 70% from its peak in early 2000, so it is not time to get overly excited.
The problem that remains in the tech sector, he added, is a lack of any sign of a broad increase in tech spending by corporate customers.
'There is still some overhang in tech from the excessive spending that took place in 1999-2000,' said Torry. 'IT managers are safer in their jobs if they don't spend their budget than if they do.
'This means budgets won't be spent this year in order to provide cashflow to the business. As a result, fourth-quarter results will be poorer than last year's.'
SGAM is currently running a 2% discount on the Technology unit trust, on all lump-sum investments including Pep and Isa transfers.
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