View more on these topics

Industry titans weigh in on star manager culture

Terry-Smith-Fundsmith-500x320.jpg

Neil Woodford has admitted it is difficult to assure staff and clients that a fund is sustainable beyond one individual in a discussion about star manager culture.

His former employer Invesco Perpetual saw £5bn in outflows in the year following his departure in 2014. He now runs the Woodford Equity Income fund and the Woodford Patient Capital Trust.

“It’s a really difficult challenge for people like us to create the multigenerational characteristic in a fund business,” Woodford told an audience hosted by Jupiter Asset Management.

“The biggest challenge is maintaining culture, which gives you the foundations to create longevity beyond my professional life.”

Woodford was joined by Terry Smith, chief executive of Fundsmith, who said he thought people worried about succession “a little too much”. “It’s not like being Berkshire Hathaway when Warren Buffett dies, where a rather large discount may emerge temporarily.”

However, he confirmed his firm had leadership and ownership succession plans in place. Julian Robins, head of research at Fundsmith, will take over the firm, Smith confirmed, while ownership would be an “automatic” process from the fund’s income.

James Findlay, who runs the Findlay Park American Fund, said the team at his fund had been evolving in the last couple of years. “We’ve been much stricter in making sure the whole team is making sure every single stock in the investment portfolio meets the investment philosophy,” Findlay said.

The culture of star managers is in decline, according to a report released by PwC last month, as both senior executives and clients recognise the material risks associated with promoting an individual instead of a team.

Firms will increasingly focus on succession planning as well as remuneration structures that reward team decisions and outcomes, PwC said.

Woodford was quoted this week saying that the investment profession has a whole has become too complex.

Recommended

Big multi-managers may miss out on niche firms

Smaller hedge funds are often early-stage managers investing in niche areas and, in general, tend to perform better than later-stage managers. Smaller multi-manager funds, such as the newly launched PSolve Alternative Investments select opportunities fund, can easily access small specialist hedge funds. But the bigger multi-manager funds may neglect niche players because they are often […]

Profits up 44% at SimplyBiz

SimplyBiz has reported a profits rise of 44 per cent to £3.1m in the year ended December 31, 2006. Turnover was up by 24 per cent to £7.48m.

Pre-PPF failures to get right to compensation

The Government plans to amend legislation so that pension schemes that failed before the Pension Protection Fund was established are entitled to receive compensation. A Department for Work and Pensions consultation, launched last week, reveals plans to extend the qualifying conditions of the financial assistance scheme to allow members of failed schemes, such as the […]

11

MPs to quiz FSA over Arch cru package and IFA liability

MPs will quiz the FSA next month on the size of its £54m Arch cru compensation package and the fact investors will be left having to claim against their IFA. This week, Labour MP Tom Greatrex and Conservative MP Alun Cairns revealed they plan to lead an all-party Parliamentary group to lobby for 100 per […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment