- Star manager culture is no longer as prevalent as it was, but there are still emerging talents to be found in the fund management industry
- What makes a promising, up-and-coming fund manager?
- Who are the rising stars of today?
Paul Angell, head of investment research at AJ Bell, comments:
“Genuine rising stars in fund management are a rare breed. Fund buyers typically focus on experience and long-term performance track records, making appointing junior fund managers a risk to asset managers. On top of this, asset managers continue to attempt to move beyond the era of star managers, preferring to focus on investment teams and processes, which they hope will bring more resilience to both the management of funds and the stickiness of assets should a fund manager depart.
“That said, the industry remains a people business. Individuals make investment decisions and these same individuals typically communicate said decisions onto fund buyers. Bonds of conviction and trust are therefore unavoidably built between fund buyers and individual fund managers.
“A rising star manager blends that rare mix of youth, intelligence, confidence, opportunity and good fortune. Firstly, they need sharp intellect that can both develop and execute an investment process in ever-changing financial markets. Second, they need an ability to confidently articulate their investment approach, fund positioning and drivers of performance. Thirdly, they must get the backing of their business in being appointed a named manager on a fund in the first place. And finally, and perhaps the most difficult to achieve, they need a burgeoning track record that evidences their investment capabilities.
“Typically, a rising star will also be flanked by more experienced fund managers, providing counsel and challenge as well as assuaging investor fears about the limited experience of the individual.”
Who are the rising stars of today?
Jonathan Golan – Man GLG Sterling Corporate Bond
“Perhaps the stand-out rising star in the industry, Jonathan Golan was plucked out of the Schroders fixed income team in 2021 following an excellent start to his life as a fund manager. His new employers quickly backed him with the launch of the Man GLG Sterling Corporate Bond fund in September 2021. The fund has subsequently been the top performing fund in its sector, raising over £1 billion of assets in the subsequent three years, an extremely impressive growth rate for a fund short of its three-year track record.
“Jonathan, and his two credit analysts, have a bottom-up approach to credit investing, focusing on smaller bonds which they see as undervalued versus larger equivalents. The fund is managed with more credit risk than the market, often using the maximum 20% allowance for high yield bonds. Jonathan also uses derivative overlays to enhance the fund's prospective returns and to hedge against adverse market movements.”
Liam Nunn – Schroder Global Recovery
“Another impressive young talent is Liam Nunn, co-manager of the Schroder Global Recovery fund. Liam is a passionate value investor, thoroughly committed to the Schroder value team’s disciplined accounting-based process where they scour the cheapest 20% of global stocks, looking to avoid value traps.
“Liam has been named on the fund since February 2020. Since then, the fund’s assets have more than tripled to over £900 million, while the fund has also outperformed the MSCI World Value index.
“Liam is also arguably a beneficiary of Kevin Murphy’s recent departure from the business as, following an internal re-shuffle of fund management responsibilities, Liam is now one of just two co-managers on the fund.”
Charlotte Yonge – Trojan Ethical
“Another impressive emerging manager is Charlotte Yonge at Troy, who has been the sole named manager on the Trojan Ethical fund since its launch in March 2019. Over this period the fund has grown to over £800 million in size, whilst delivering steady capital growth and lower volatility than wider markets.
“The fund is a defensively managed long only, multi-asset strategy, sitting alongside the more seasoned Trojan fund, with a high degree of emphasis on capital preservation. The manager has a low turnover approach and concentrated equity holdings. Charlotte tends to invest in traditional asset classes such as equities, government bonds and gold, and is reactive to market opportunities with her weightings to these core classes. Within equities her preference is for higher quality, cash generative businesses. The fund also has an exclusions approach to ethical investing spanning tobacco, pornography, fossil fuels, alcohol, gambling and high interest lending.
“Despite being invested in major, liquid asset classes, the fund still takes on market risk, and there is therefore no guarantee the fund will protect capital over any period.”