(July 23, 2013) — “I hope we’ve been able to inspire confidence – the Global Absolute Return Strategies Fund (GARS) is not the brainchild of one person,” Guy Stern, the incoming head of multi-asset and macro investing at Standard Life Investments told investors this morning.
He was responding to a barrage of questions over the fund’s future that hijacked the regular quarterly progress call made by the GARS managers. Investors and consultants wanted to know about succession planning following the announcement last week that the fund’s main architect, Euan Munro, had left the firm.
Stern repeatedly told attendees at a webinar that managing the peer-beating strategy was a real team effort, with more than 100 people in the departments behind its success.
“The GARS process has remained largely unchanged since its launch in 2008,” he said. “There is a very big team and all the functions behind the fund have been in place since the beginning.
“There might be some names that change-we are always adding to the team-but we have done our succession planning,” he said, adding there were still staff on the product who had been there at its inception.
Stern said the team had done a wide range of testing and risk management procedures on GARS, including a scenario where key staff members left the team.
The announcement that Munro was leaving Standard Life Investments to take up the CEO role at competitor Aviva Investors drew to a close a 15-year career at the firm and its insurer parent.
“It’s unfortunate that Euan is leaving as I have enjoyed working with him over the past five years,” said Stern. “It is unfortunate for us as we have all enjoyed working with him, but we wish him well – and GARS is not about one person.”
Stern, who has taken over Munro’s responsibilities as far as managing GARS and the rest of the firm’s multi-asset suite, said the role had always been one akin to a “player-manager”.
“The team is stable, but not everyone will have the same job. I will have to pick up other duties that Euan used to carry out, and give up others to the team,” said Stern.
He maintained there was enough coverage to pick up the extra responsibilities, and insisted the newer members of the team-brought in nine months ago when three other founding members quit to set up a multi-asset product at Invesco-were already deeply involved in the day-to-day running of the fund.
“We have a deep bench,” said North American Stern. “There will always be others hunting our people-we take it as a compliment. Really good people don’t change their jobs as they want to leave something, and all our former colleagues have left to take a great step up or have the opportunity to build something again.”
Staff compensation and incentives will be reassessed in light of Munro and his three founding members’ departures, but Stern highlighted that Standard Life Investments had some of the highest retention rates in the sector.
“We have had investor inflows since September – the GARS portfolio is bigger than one person.”
In the second quarter of the year, GARS produced a slightly negative return-but still outperformed global equities-pulling year-to-date performance to 5%, Stern told investors.
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