Columbia Threadneedle Investments has shifted the management of its Asian fixed income assets to its emerging market debt team in London, resulting in the departure of Asia bond head Clifford Lau, AsianInvestor can reveal.
This follows the recent closures of sub-scale bond products elsewhere by the $459 billion fund house in a challenging environment for mid-sized investment houses, as asset owners seek deeper relationships with fewer partners amid widespread disillusionment with underperformance by traditional active managers.
Tim Jagger, London-based head of emerging market debt, has taken over as lead portfolio manager for the Flexible Asian Bond Fund, said a spokeswoman for Columbia Threadneedle in an email. The strategy – the firm's only dedicated Asian fixed income fund – had $39.4 million in assets as of May 31, alongside segregated Asian bond mandates, according to research house Morningstar.
The spokeswoman added: “Under Tim Jagger’s leadership, we have made refinements to our organisational structure for the EMD team, which we believe will enable the team to deliver better, more consistent investment outcomes for our clients globally."
Columbia Threadneedle retains four fixed income staff in Asia. One of them, sovereign bond analyst Low Eng Tat, will transfer from Malaysia to Singapore next month, said the spokeswoman, thereby consolidating the existing team in the Lion City.
The firm also plans to add a senior sovereign analyst to bring the headcount up to five, she noted, declining to say when that would happen.
However, Farid Kamarudin, listed on LinkedIn as Malaysia chief executive at Columbia Threadneedle, had also held the role of senior fixed income fund manager. The spokeswoman declined to confirm whether this was still the case or whether the firm would have any staff left in Kuala Lumpur after Low's move to Singapore.
The three fixed income team members currently in Singapore are: Oh Yi Ming, credit analyst and deputy portfolio manager for the Flexible Asian Bond fund and segregated mandates; Justin Ong, senior credit analyst; and Dickson Teo, Asian fixed income dealer.
Lau did not reply to requests for comment from AsianInvestor, and Kamarudin did not immediately respond to an attempt to contact him on Monday evening (June 17).
There has been retrenchment elsewhere too at Columbia Threadneedle.
The firm recently closed two global bond funds and will in July shift management of its global emerging market equities fund to Dara White, US-based global head of emerging market equities.
The £256 million ($322 million) global emerging market equities strategy is currently run by London-based Ilan White, who reportedly retains oversight of the Latin American equity fund, though the spokeswoman declined to confirm this. The product has heavily underperformed its peers over one, three and five years, posting cumulative returns of 4.6%, 31.8% and 26.0%, respectively, as of May-end.
The firm also closed its $3 billion Global Strategic Bond Fund on May 8 and said it would shut the £23 million Absolute Return Bond Fund on July 26. It said their relatively small size made them economically unviable and it felt they were unlikely to attract new investors. These changes follow the January closure of its Global Bond Opportunities Fund for similar reasons.
Such moves reflect the challenges facing mid-sized fund houses, which are neither large enough to rely on the cost benefits of huge scale nor small enough to operate as specialist players.
“There is a lot of pressure on firms in the squeezed middle,” one Hong Kong-based headhunter told AsianInvestor on condition of anonymity. “If they can't achieve scale in certain funds or asset classes, they are increasingly prepared to cut sub-scale propositions if they don’t anticipate a big swing in allocations into the fund or asset class.”
Late last year Dutch fund house NN Investment Partners cut the bulk of its emerging market equities team, mostly in Asia. And Axa Investment Managers last month waved goodbye to Mark Tinker, Asia head of Framlington equities, after closing its multi-asset team led by Michael Ding in early 2018.