Fund manager turnover concerning: S&P

The nature of staff departures from Australian funds management companies in the second quarter of this year has been “more concerning” than those in the first quarter, according to research house Standard & Poor's (S&P).

S&P has released its second quarterly ‘Musical Chairs’ report on fund manager movements for 2010, with the research house noting, in many cases, the second quarter departures involved small teams moving or represented persistent turnover over an extended period.

The second quarter of this year saw 11 key staff departures announced from funds rated by S&P, with those departures impacting $11.3 billion of invested funds.

Of S&P’s rated funds, BlackRock suffered the highest number of departures year to date, with the loss of four investment managers (Andrew Jackson, Davis Walsh, Glen Harris and Nick Burt).

Amundi’s international fixed interest team is also being affected by multiple departures. Amundi lost two members of its ‘architect committee’ in the first quarter (Bruno Crastes and Vincent Chailley), while Loic Cadiou and Carlos Galvis resigned in early July (their departures will be captured in S&P’s third quarter report).

AMP’s Australian equities team has seen two departures since November last year, in Gary Armor and Michael Hughes.

S&P also noted that Challenger’s Australian equities team had seen a turnover of three staff since 2006.

The research house said most of the teams discussed above had also lost analytical and investment personnel.

Boutiques losing staff in the second quarter of this year included Australian Ethical, with chief investment officer Martin O’Halloran departing, and portfolio manager Sarah Shaw leaving RARE along with two colleagues.

The research house said the departures covered in its report were only “the tip of the iceberg”, because it did not include senior management and research roles, or portfolio managers who were transitioning to different roles within an organisation.

S&P said in 2010 to date there had been “numerous” departures from senior management and research ranks and “several instances” of internal transitions of portfolio managers.