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Change at the Top: FE Reveals Alpha Managers of 2018

By Corporate

Updated on Thursday, 15 February, 2018

  • 43 new FE Alpha Managers awarded, 32 of which have never previously made the list
  • 26 managers lose their FE Alpha status
  • Fidelity tops the board at group level
  • Smaller Companies managers shine

 

LONDON, 12 FEBRUARY 2018: There has been big churn in the names taking the title of 2018 FE Alpha Manager at this year’s rebalance, with the emergence of 43 new FE Alpha Managers and a cull of 26 that previously held the highly coveted status. 

Each year ratings and research firm FE, recognises the top 10 per cent of UK retail-facing managers based on their performance throughout their entire careers [1]. 198 managers have scooped an FE Alpha Manager rating this year in the annual rebalance. 

Rob Gleeson, head of FE research, said: “The purpose of the FE Alpha Manager rating is to take a step back and remove short-term market movements or cyclical factors from the analysis. It allows us to identify those managers who can add value over the very long term – which is fundamental considering the market conditions we have been facing over the past few years.”

For the second year running, the IA Smaller Companies sector boasts the biggest percentage of FE Alpha Managers with a third of managers achieving the title (33%), closely followed by Asia Pacific inc Japan (29%) and European Smaller Companies (28%).  At the opposite end of the scale, only 4% of Global Equity Income Managers achieved FE Alpha Manager status and no UK Gilts or Index Linked Gilts Managers made the grade. 

Gleeson added: “Smaller companies, emerging markets and Europe have been a more reliable hunting ground for alpha managers. These markets have been suffering from either structural inefficiencies or uncertain political situations, which adds a lot of noise. This provides opportunity for careful analysis to add value. Bond markets have not offered much in the way of opportunity to outperform for a while as yields and spreads have remained tight, this is reflected with few bond managers making the grade for Alpha Manager status.

Top Groups & Managers

Fidelity tops the group leader board with 10 FE Alpha managers. In second place with six FE Alpha Managers each are Schroders, BlackRock, GAM, Jupiter Asset Management and Polar Capital. 

Charles Younes, Research Manager at FE commented: “There is no single factor determining success at a group level.  Fidelity’s Asia Pacific equities and emerging markets coverage gives them an edge over groups that don’t have managers in these areas whilst BlackRock’s strength here is largely down to their expertise in traditional asset classes.  Meanwhile, three of Polar Capital’s six FE Alpha Managers take a thematic approach by working on specific sectors, proving that managers working this way can also add value.”

New Entrants

There are 43 new entrants this year, 32 of which have never previously been awarded an FE Alpha Manager Rating.  The list includes (selected here by alphabetical order) Craig Bonthron of Kames, Shawn Driscoll of T.Rowe Price, Ben Fitchew of Ardevora, Paul Flood of Newton and BNY Mellon and James Govan of Barings Asset Management.

Managers that have lost their FE Alpha Manager status

There has also been a considerable number of FE Alpha Managers losing their place on the list.  Among the 26 to have lost their FE Alpha Manager status are Ben Leyland of JOHCM, GAM’s Paul McNamara, Kevin Murphy and Nick Kirrage of Schroders and Stephen Bailey of Liontrust.

Younes said: “Managers with a value bias have fared badly this time around – highlighted by managers who favour this style such as Kevin Murphy and Nick Kirrage of Schroders and Martin Walker of Invesco Perpetual dropping out. FE Alpha Manager ratings take a career view, suggesting that even over the long-term, value investing has not offered managers huge scope to outperform.”

FE will announce its Hall of Fame Managers (those who have been awarded an FE Alpha Manager Rating for seven consecutive years) and the nominees for the FE Alpha Manager awards in May ahead of the FE Alpha Managers 2018 award ceremony on May 17. 

About the FE Alpha Manager Ratings

Each year ratings and research firm FE, recognises the top 10 per cent of UK retail-facing managers on their track records going back to 2000, with extra weighting for managers with the longest track records to highlight the benefits of experience. To determine the ratings, FE looks at a manager’s ability to create risk-adjusted alpha, outperformance in both rising and falling markets, and those who consistently beat their benchmarks.

For a full list of the FE Alpha Managers, please contact the FE press office.

[1] Track records going back to 2000, with extra weighting for managers with the longest track records to highlight the benefits of experience.

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