Colonial First State (CFS) has finalised its decision on the future of two Royal London Asset Management (RLAM) funds following adviser feedback after Ironbark Asset Management withdrew a $3 billion mandate.
Earlier this year, several RLAM global equities managers announced they would be departing the asset manager to set up their own firm called Life Cycle Investment Partners. This included the head of global equities Peter Rutter who had been at RLAM for seven years.
This UK-based firm would be an offshore affiliate of Pinnacle Investment Management.
Ironbark had held a mandate with RLAM for several years on Ironbark Royal London Concentrated Global Share Fund, Concentrated Global Share Fund – Class H (Hedged), Core Global Share fund – Class A, and Core Global Share Fund – Class H.
While it initially planned to transfer the mandate to Life Cycle, delays meant it opted to withdraw the $3 billion mandate and appointed new investment managers in Brown Advisory and Robeco.
Separately, CFS issues the Ironbark Royal London Concentrated Global Share Fund and Ironbark Royal London Core Global Share Fund on its CFS FirstChoice and Edge platforms. In this case, CFS is the responsible entity and they are managed by RLAM on a subdelegation arrangement with Ironbark.
“CFS instructed RLAM to manage the funds on a ‘care and maintenance’ basis until a decision had been made about the future management of the funds,” the firm said in September.
“CFS is listening and taking feedback from financial advisers and other professional investment researchers and in the midst of reviewing several candidate managers.”
In an update in mid-October, CFS said the alternative candidate managers had “only recently been brought to the Australian market” and therefore they would prefer to retain the management of RLAM.
“CFS has since reviewed the actions taken by RLAM since the departure of key staff and CFS is comfortable that;
- the RLAM Global Equities team retains significant resourcing and several senior appointments have also been made strengthening that resourcing, and
- the same investment philosophy, processes, controls and technology were retained within RLAM.
“CFS continues to listen and take feedback from financial advisers and other professional investment researchers and is working constructively with several managers. However, given a number of other candidate strategies have only recently been brought to the Australian market, CFS considers it appropriate retain RLAM to manage the fund at this time.”
The decision will be reviewed again in early 2025 or sooner if more information becomes available.
As a result, the name of the affected funds will change from Ironbark Royal London to Royal London.
Last week, Life Cycle received its first research rating from Zenith Investment Partners as it unveiled a Concentrated Global Share Fund and Global Share Fund.
“Zenith holds the senior members of the investment team in high regard. In addition, we have been familiar with the team over an extended period, most notably during their tenure at RLAM where the strategies they managed generated highly attractive investment outcomes. We view the team’s prior working relationship as a positive for the fund as it reduces team cohesion risk typically associated with a start-up investment boutique.
“Zenith views Peter Rutter as being crucial to the ongoing success of the fund and business. His departure would result in an immediate reassessment of our rating. However, we acknowledge that there is depth within the team at LCIP. Given the investment team’s significant equity stake in LCIP, Zenith believes the team is highly incentivised to remain with the business over the long term.”
