GARS retains strong rating

Dave Jubb, David Millar, and Richard Batty of the GARS multi-asset investment desk recently left SLI to start a similar fund with Invesco Perpetual.

The two investment directors and global investment strategist are to be replaced by in-house bond managers, Roger Sadewsky and Ian Pizer, and equity strategist Neil Richardson.

Aon Hewitt consultant Jesal Mistry said the company was impressed by the replacements GARS had appointed.

“We sent researchers to sit down with SLI’s new team and grill them, and we found that they were very experienced. Yes, the departures are a loss for GARS, but the people replacing Jubb, Millar, and Batty are just as good and it seems we will be recommending GARS retain its rating,” he said.

The £12.1bn fund has surpassed its own projections over the past year. Its three-year annualised return has not been below the six-month Libor since Q1 2009.

It also has a reputation for doing well when markets are volatile, demonstrated by its trade of 5 per cent holdings in Swiss francs for Norwegian krone in September 2011, up 18 per cent. The fund told PW the deal was “like Christmas coming early”.

Investment consultancy Mercer also sent researchers to SLI to assess the impact of the recent departures, and met with head of multi-asset investment and GARS architect Euan Munro. It concluded it was still unclear what advice it would be giving to clients about the fund.

Ratings agency Standard & Poor’s said it too would be taking no action on GARS’ current gold grading.

Investment analyst Bestinvest also said it would not be downgrading GARS from its top five-star rating.

Analyst and ratings agency Morningstar/OBSR confirmed it still has the fund “under review”; its rating for GARS before September 13 was bronze.

People familiar with the proceedings say Jubb, Millar and Batty’s departures were not financially motivated, and that SLI had the sign-off to match any salary Invesco Perpetual offered.