HSBC Asset Management has been left reeling by the defection of five key fund managers from its highly regarded European and UK teams to stockbroker Cazenove.
The managers – including UK growth and income star fund manager Tim Russell and respected European growth manager Chris Rice – are expected to leave within three to four months to spearhead Cazenove's push into the core areas of the retail market.
Many IFAs say they will advise clients to follow the managers and take their money to Cazenove.
The other three managers joining Cazenove are UK equity managers Julie Dean and Wade Pollard and European fund manager Steve Cordell.
Some advisers immediately suspended sales of the funds. The funds have £2bn in assets. They have all been first or second-quartile performers over the past five years and are core holdings for many IFAs.
HSBC reacted by naming chief investment officer for European equities Philippe Alter as head of the UK equity team and its household names fund manager Bob Morris as manager of the UK retail funds.
Media relations manager Rob Skinner says: “We are disappointed by the departures but people do move on. We are still well placed.”
Cazenove head of investment funds Robin Minter-Kemp says: “There is a growing intolerance of average performance and these managers' strength is their ability to deliver with low volatility.”
Hargreaves Lansdown investment manager Ben Yearsley says: “HSBC is up the creek without a paddle – five managers is a lot to lose.”