Note: This story was updated at 2:30pm.
Hugh Yarrow is leaving Rathbones following a restructuring of the group’s fund range.
Yarrow’s £15m High Income fund is being merged into the £32m Blue Chip Income and Growth fund. The Blue Chip vehicle is managed by Julian Chillingworth, the chief investment officer.
This fund was previously called Income and Growth but was renamed earlier this month as it moved into the Investment Management Association’s (IMA) new Income & Growth sector.
Peter Pearson Lund, the chief executive, says the company decided to merge the two income funds because of their small size and to consolidate the group’s income offerings. “High Income has £15m under management and Blue Chip is larger, but they have a similar investment objective. They are principally large cap, UK-focused and have a similar yield.
“In light of present business circumstances you have to become more focused. It gives Independent Financial Advisers (IFAs) a clearer choice in terms of equity income,” he says.
Yarrow is expected to take the summer out of the industry to spend time with his family.
Meanwhile Carl Stick’s Special Situations fund will be merged into the Smaller Companies fund and be relaunched as the Rathbone Recovery fund, with a new investment objective. It will be managed by Chillingworth and Marina Bond. This will leave Stick free to concentrate on managing his £504m Income fund.
The Recovery fund will invest primarily in British companies and possibly some European stocks. The managers will look for companies whose recovery potential is underappreciated by the market. The 50 to 60 stock portfolio will sit in the IMA UK All Companies sector.
Pearson Lund says: “Special Situations has had a difficult time. Performance has not been good in the last year or two. The small-cap area of the market has not done well – small cap is a high risk strategy. We wanted to start again.” A more balanced portfolio investing across the market spectrum will be better placed to perform, he adds.
The plans will be presented to unitholders in the coming weeks, and if approved will be completed by May this year.