Investors in the high-profile Royal London Global Equity Select (BF93W97) fund face a dilemma following the surprise resignation of star manager Peter Rutter from RLAM (Royal London Asset Management) alongside several of the firm’s global equities team.

The managers are expected to set up their own company, having secured financial backing from Australia’s Pinnacle Investment Management. The news represents a big blow for RLAM, since alongside colleagues Will Kenney and James Clarke, Rutter is responsible for funds managing close to £6 billion for the firm including the five-star Morningstar-rated Royal London Global Equity Select.

This vehicle underwent a ‘hard close’ last year after becoming a victim of its own success, with RLAM no longer accepting new money into the fund as it had grown too popular following a sustained period of success.

Citywire AAA-rated Rutter, who was RLAM’s head of equities, has resigned along with portfolio managers Kenney, Clarke, Niko de Walden and Chris Parr. However, in a press release (29 April), RLAM stressed there would be ‘no change to the investment approach which underpins its equity capabilities across Global Equity, UK Equity, Sustainable or the Quantitative funds. The funds will continue to be managed in line with their objectives and restrictions.’

Ranked first-quartile in the IA Global sector over one, three and five years, and offering exposure to the likes of tech titans Apple (AAPL:NASDAQ) and Microsoft (MSFT:NASDAQ) as well as chip designer Nvidia (NVDA:NASDAQ) and healthcare colossus UnitedHealth Group (UNH:NYSE), Royal London Global Equity Select has generated formidable five-year annualised total returns of 18% under the outgoing team’s repeatable ‘Corporate Life-Cycle’ framework, a tried-and-tested investment strategy which Shares detailed here in October.

Unit holders will need to monitor performance going forward in order to decide whether to stick with the £740 million vehicle or follow managers Rutter, Clarke and Kenney, who are establishing a new boutique. Their departure creates uncertainty regarding the future direction of the funds they managed at RLAM, which have a distinct approach. No directly comparable fund springs to mind, although other well-regarded global portfolios include Terry Smith’s Fundsmith Equity (B41YBW7) and the James Thomson-steered Rathbone Global Opportunities (B7FQLN1) for instance.

RLAM chief executive Hans Georgeson said: ‘We remain committed to offering a first-class equity capability and will continue to invest in the team. Piers (Hillier, chief investment officer) brings huge experience to the leadership of our global equities capability, supported by an extremely talented team that also bring many years of expertise in equity markets.’ 

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