Investors and backers of Richard Buxton's UK Alpha Plus fund have reacted positively after the group revealed it has poached well known managers from Jupiter and Neptune to replace the outgoing star.
Schroders moved quickly to fill the void in its UK equities desk left by the departure of Buxton and co-manager Errol Francis, hiring Philip Matthews (pictured) from Jupiter and Alex Breese from Neptune.
Matthews - who currently runs the £368m Jupiter Growth & Income fund - is among the top performers in the UK All Companies sector, returning 21.9% over the last year ahead of a peer group average of 16.3%.
He has also outperformed over three and five years according to Morningstar (to 5 April), returning 37.5% and 60.1% respectively, versus average gains of 28.1% and 32.1%.
Crucially, he has also outperformed Buxton himself. The Schroder UK Alpha Plus fund delivered 19.7% over one year, lagging Matthews, and was also substantially behind over three and five years.
Gavin Haynes, managing director of Whitechurch Securities, said he expects to maintain a ‘buy' rating on the fund now Matthews is coming in.
He said Matthews brings to Schroders an impressive long-term track record, the ability to outperform in rising and falling markets, and shares a similar focus on blue chips which will be important given the size of the mandate he is taking on.
"Although Matthews does not have the profile of Buxton, as a fund manager he ticks a number of boxes we would expect to see from a replacement fund manager," Haynes said.
Darius McDermott, managing director of Chelsea Financial Services, added: "We will be keeping Schroder UK Alpha Plus on a 'hold' pending a meeting with Philip Matthews, but we definitely do not think there is any reason for investors to panic.
"The hire is positive and Schroders is making every effort to bolster its UK equity team."
Some had expected Schroders to hire someone with a longer track record to replace Buxton, but while experts recognise Matthews' name does not carry the same gravitas as the man he replaces, they said this could actually be useful.
"Rather than hire a manager that runs money in exactly the same way, Schroders has gone for a fresh start, and that seems sensible rather than hiring someone who has to carry Buxton's mantle," Adrian Lowcock at Hargreaves Lansdown added.
Meanwhile, Breese has been bought in to further strengthen Schroders' UK equity desk, an area no asset manager can afford to neglect.
The Neptune UK Special Situations manager will run £642m Schroders UK Equity fund when he moves over later this year, and with a track record which is vastly superior to his new fund, Schroders will be hoping he too can maintain his impressive track record.
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