Man GLG’s acquisition of Sanlam Four’s Strategic Bond fund has been labelled a “forced sale” by investment managers, carried out in a bid to protect the fund’s assets.
The deal, still subject to regulatory approval, will see Sanlam’s strategic bond investment strategy, with £290m ($372.5m, €321.7m) worth of assets, become part of Man GLG’s fixed income offering.
Managers Craig Veysey and Francois Kotze will leave Sanlam to run the vehicles in their new home at Man GLG.
Ryan Hughes, head of active portfolios at AJ Bell, said the sale was likely prompted by fears the co-managers’ departure would lead to a high probability of redemptions and a risk of the fund becoming unviable.
“I think it is right to assume that this is a forced sale by Sanlam simply because the managers will have told the firm that they are moving to Man GLG.”
Hughes said this was the best outcome for Sanlam, which will receive some revenue from the fund because of its current size.
“Man GLG also benefit as they receive a fund with an established track record and critical mass enabling them to hit the ground running when the managers join,” he added.
Our sister publication Portfolio Adviser has reached out to Sanlam Four for a response.
Investors prioritised
The course of action taken by Sanlam Four was not common in the industry, said Darius McDermott, managing director at Chelsea Financial Services.
“Sanlam have taken a grown-up decision by looking after the people who bought the fund and getting some form of an economic interest out of it, rather than just losing the managers and then the assets.”
Both McDermott and Hughes said Sanlam Four had put the best interests of investors first in their decision.
Jonathan Polin, group chief executive of Sanlam UK, said: “Our absolute priority is the safe stewardship of our clients’ assets and it is in their best interests to see the fund transition smoothly to Man GLG where it will be managed by the same team, to the same strategy and with the same process, methodologies and tools.
“This is not a decision we have taken lightly.”
The strategic bond fund duo
Veysey joins Man GLG, having spent 17 years in the fund management industry. He has been head of fixed income at Sanlam since 2009.
He was the lead portfolio manager on the Sanlam strategic bond strategy since its launch in 2012 and prior to this, managed global bond funds at Scottish Widows Investment Partnership and WestLB Mellon Asset Management. He was also a senior member of the global fixed income team at HSBC Investment Management.
Kotze joined the fixed income team at Sanlam Four in 2017, working alongside Veysey as assistant portfolio manager on the strategic bond strategy. Before joining Sanlam Four, he was a fixed income research analyst at Rathbone Brothers, and prior to that, a senior credit and macro analyst at Sanlam, where he also worked with Veysey on the Sanlam Strategic Bond Fund.
