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Can Henderson find road back to former glory?

John Husselbee’s departure as head of multi-manager at Henderson Global Investors has left IFAs and industry commentators reflecting on what the group has left to offer investors.

Husselbee is one of the most experienced players in the multi-manager market, starting out in the early 1990s alongside such industry figures as John Chatfeild-Roberts, then at Lazard and now Jupiter, and Gary Potter and Robert Burdett, then at Rothschild and now Credit Suisse.

Of late, however, Husselbee has fallen off the radar of several IFAs because of the poor performance of Henderson’s multi-manager range. Its high-profile 114m independent growth portfolio has fallen by 20.5 per cent over the five years to May 2, ranking it 38th out of 42 funds in the IMA’s active managed sector.

Husselbee’s departure coincides with Henderson’s plans to revamp its multi-manager range. It aims to launch a new suite, called Managed Solutions, next year, taking advantage of Ucits 3 flexibility to incorporate traditional bond and equity holdings as well as exposure to property, commodities and hedge funds.

Apart from multi-manager, Henderson’s performance has been uninspiring across several asset classes. Over the five years to May 2, its 348m UK all companies fund is down by 25.9 per cent against a sector average of -5.8 per cent, placing it 203rd out of 213.

The Henderson UK equity income fund over the five-year period to May 2 has delivered a positive result of 7.4 per cent but it significantly lags behind the sector mean return of 21.1 per cent for the period.

Over three years to May 2, the Henderson corporate bond fund has slightly underperformed against its peers, delivering 15.3 per cent against a sector average of 16.3 per cent.

Hargreaves Lansdown sen-ior investment analyst Meera Patel says Henderson’s performance has been dreadful. She feels that since the firm’s demerger from AMP in Dec-ember 2003, its focus has been distracted. She hopes the rec-ruitment of Phil Jefferson as director of UK wholesale will turn things round.

Patel says: “Jefferson seems very forthright and has a very strong will. I get the feeling he is out there to make an impression and do a good job but we will have to see what happens. The company has a lot of work to do, as not just Henderson’s UK products but its Pacific and Asian products were big sellers in the 1980s and have since fallen off the scale.”

Credit Suisse multi-man-ager Gary Potter says Henderson is still going through a great deal of changes at the moment. He says corporate concerns may have acted as an excuse for people not to consider Henderson when selecting funds. In the mid-1990s, Potter rated the Asian desk, run by Heather Manners, who has since left. He also rated Richard Prew’s UK growth fund but Prew has also left.

Potter feels Henderson may have lost some clarity of focus but sees the appointment of Jefferson and the changes in multi-manager as signs of a desire to get some focus back into the system.

Potter says: “You have got to remember that Henderson was one of the darlings of IFAs during the mid-1990s and the name Henderson is a good name in the business. It is one of those names that rings out investment and I am sure that the fire is still smouldering. Henderson has probably come to the bottom of its J-curve. People are probably waiting to see what happens now. Things are happening but it is too early to tell.”

Jefferson says: “If you are asking me if we could do better, then, of course, we are looking to our existing range. IFAs tell us our performance is below par and that is why we are trying to make changes.”

He has made changes in equity and fixed income and has given the flagging UK extra income and UK equity income funds to Job Curtis and James Henderson. Henderson has run the group’s highly reg-arded Lowland investment trust for 14 years and Curtis also comes from the investment trust team. Jefferson says he sees early signs of performance turning round. He says the recruitment of David Jacob from UBS and Gareth Quantrill from Scottish Widows Investment Partnership should interest intermediaries.

The big name departures concern Patel, who questions the incentives offered to fund managers. She says: “If managers’ interests are not aligned with the interests of inv- estors, it is difficult to see why they should run the money.”

Henderson head of equities Andrew Formica has been overhauling the equity desks and tried to address the issue of remuneration.

Jefferson says: “Andrew has addressed the issue such that managers and teams have a specific and measured objective to improve performance on all products linked to their team. There is no question that the impact should be a uniform concentration on each product’s performance.”

The overwhelming issue with Henderson seems to be a loss of investor goodwill. Egg design and marketing managing director Martin Fox says: “They used to have a super name. It is so sad when a brand loses its capital like this.”

This is something Jefferson understands. As an IFA in the 1980s, he remembers Hend- erson as a proud brand alongside Gartmore, M&G and Standard Life. At the time, relative newcomers such as Skandia, Perpetual and Fid- elity were just starting to make their presence felt.

Jefferson says: “We accept we are not seen in the same frame as the big names these days but we intend to be so. One of the things that CEO Roger Yates and I believe is that there is a lot of latent goodwill towards Henderson that we are determined to capital- ise on. I am a very impatient guy and I would like us to be working much quicker but I think it is entirely fair that any IFA would take a step back, look at what we are doing and form their own judgements.”

It seems Henderson is keen to make changes to restore performance and its good name but it remains unclear whether these changes will have the desired effect. In an increasingly competitive industry, it is not going to be an easy task.


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