A duo of bond managers are departing as Baillie Gifford seeks to turn around its underperforming bonds department.
The firm's bonds department has assets under management for UK clients of around £2bn.
An email shared with FT Adviser revealed that four funds are impacted, with Lucy Isles, co-manager of the High Yield Bond Fund and European High Yield Bond Fund, and Stuart Kelly, co-manager of the Sterling Aggregate Bond Fund leaving the firm.
Faisal Islam, who currently works on the Strategic Bond fund, will move across to the high yield bond fund.
While Robert Beltzer, the firm’s head of credit research, will join to attempt to turn around the Strategic Bond fund.
This mandate, which is £467mn in size, has sharply underperformed recently, losing 8.6 per cent in three years, while the sector's average loss was 3.6 per cent.
The firm’s £900mn Baillie Gifford Investment Grade Bond fund has lost 2.1 per cent over the past five years, compared with a gain of just over 2 per cent for its sector.
The current manager Paul Dilworth will be joined in the management of this fund by Nektarios Chatzilefteris.
Dilworth also runs the company’s Sterling Aggregate Corporate Bond fund, which has lost 9.5 per cent compared to the sector average return for the sector of 8.2 per cent.
The firm also has a multi-asset fund, the government bond component of which will now be run by Sally Greig, the firm’s head of fixed income.
In the email to clients, Baillie Gifford wrote: “We have previously communicated that, following a review of our Fixed Income strategies and funds, we have decided to focus on supporting and growing our Fixed Income business exclusively in the UK market. As a result, we will close four funds where only a small number of clients are invested.
"This positions us to focus the efforts of our most experienced and talented investors solely on our UK-domiciled fixed income funds, creating the strongest possible platform to deliver investment success for our clients.”
Morningstar data showed investors pulled £537mn from Baillie Gifford’s retail fund offering in January 2024. The total assets under management of that business now sits at £35bn, a drop of £5bn since the same period in 2023.
A Baillie Gifford representative confirmed the contents of the above email when contacted by FT Adviser, and added: "Baillie Gifford, with circa £2bn of direct fixed income assets for UK clients, remains committed to its fixed income strategies and its long-term investment process."
david.thorpe@ft.com
