FE Trustnet asks both groups to reveal what changes â if any â will be made to the running of Cazenoveâs popular stable of funds.
The likes of Cazenove UK Opportunities, Cazenove UK Equity Income, Cazenove UK Smaller Companies and Cazenove Multi Manager Diversity will function as normal in the aftermath of Cazenoveâs acquisition by Schroders, heads of business at both groups have assured investors. Some FE Trustnet readers have expressed concern over the proposed merger, which was approved by shareholders of Cazenove earlier this month. FE Alpha Manager Julie Dean and Paul Marriage are among the most popular fund managers in terms of inflows in recent months, and Robin McDonald, Marcus Brookes and Matthew Hudson in particular have been tipped as stars for the future. While Schroders itself has a stable of high profile managers, Cazenoveâs Robin Minter-Kemp (pictured right) and Schrodersâ Robin Stoakley say investors can expect the incoming managers to have full independence. âThe emphasis of this sequence has to be continuity. This is the key consideration,â said Minter-Kemp, head of investment funds at Cazenove. âThe maintenance of the approach that has borne such strong performance has to be the priority.â Minter-Kemp says the openness of the Schroder team has been well received by the fund managers at Cazenove. âThey were very thoughtful in their approach, which has been a key attraction for our managers,â he explained. He points out that the managersâ teams wonât be impacted by the move, because they all use external analyst teams. âSince 2002, the managers took the decision to use external managers rather than in-house,â he said. âThey didnât want to be districted by a team, and wanted to have free reign to get the specialists in many areas. As a result, the move wonât impact them in this regard.â Minter-Kemp says fund mergers would be hugely unlikely, something that Stoakley (pictured left) â head of UK intermediary business at Schroders â agrees with. âThe Cazenove Capital funds and strategies are very complementary to Schroders. Our priority is transferring these funds as part of the combined business,â he said. âFor example, the Cazenove UK Equity Income fund run by Matt Hudson will continue as it is a different style to the existing Schroders fund, which is deep value. The Cazenove fund has a focus on a combination of capital growth and income.â Kevin Murphy and Nick Kirrage, who run the Schroder Income fund, use a strict value approach when picking stocks. Murphy explained his process in an interview with FE Trustnet last month. Hudson outlined his investment approach in a recent video interview. Stoakley says that Brookes and McDonald will head up the multi-manager team at Schroders, but says that Cazenoveâs business cycle team, which includes Dean, Hudson and Chris Rice, will report to Peter Harrison, head of global equities at Schroders. âMarcus and Robin will run the multi manager business as they have a market leading franchise,â he said. âThe Cazenove Capital equity fund managers will remain together, reporting to Peter Harrison, Schrodersâ global head of equities.â Minter-Kemp added: âI canât imagine Robin and Marcus not heading up the team given the experience they have in this field.â âSchroders are buying a skill set that they donât have in certain areas. We donât see the philosophy that we have as in any way being a duplication of what they have.â On the relationship between small-cap heavyweights Marriage and Andy Brough, who heads up Schroder UK Smaller Companies and Schroder UK Mid 250 funds, Stoakley said: âWe believe that these funds can run alongside each other.â Minter-Kemp added: âPaul Marriage and Andy Brough are very different. Thereâs no reason why they canât share research, but the way they pick stocks is very different. One is more focused on small to mid caps [Brough], while the other is more focused on micro caps [Marriage].â Performance of managers over 10yrsSource: FE Analytics Marriage will also report to Harrison, who before joining Schroders in 2010 was chief executive of hedge fund firm RWC Partners. On the issue of cost, both Minter-Kemp and Stoakley say there will be no immediate effect on the ongoing charges figures (OCFs) of the Cazenove funds. However, Minter-Kemp says there could be developments in the future. âThe last thing we want to do is alienate investors with changes to pricing, given that weâve already got so many problems with RDR,â he said. âThere will be alignment, and there will be conversations about ring-fencing the individual products.â Though Minter-Kemp points to the âmeteoric growthâ of some of Cazenoveâs funds, including the multi-billion pound Cazenove Multi Manager Diversity and Cazenove UK Opportunities funds, he says they will benefit from Schrodersâ superior client-book. Minter-Kemp says that confirmation of the merger is unlikely to happen until next year. âWe have a court hearing on 2 July this year, and after that we still need it to be approved by the regulators,â he said. âI donât think it will be finalised this year.â
- Tweet this article
- Tweet this article