St James’s Place has ditched one of the managers of a struggling £9.9bn fund as Britain’s biggest wealth manager looks to recover from a troubling year and deliver more value for its customers.
Impax, which has co-managed St James’s Place Global Quality Unit Trust since 2021 alongside five other investment houses, has been dropped by the firm after a review, it revealed in a stock exchange notice today.
Impax’s stock price has dropped by more than two per cent since the announcement, and is down 26 per cent since the start of 2024.
Britain’s biggest wealth manager said it had also dropped two other managers from the fund but did not identify the names of the firms it had let go.
The move was driven by a desire for managers that complement one another and has increased its weighting to US equities and technology, a letter to investors, seen by Peel Hunt analysts, said.
In St James’s Place’s annual assessment of value report last month, the vehicle was described as delivering “insufficient value” and has returned only 3.5 per cent over the last three years, compared to a 19.2 per cent growth in competitors.
However, St James’s Place says comparisons between competitors are flawed due to the way it bundles its fees.
It marks the latest in a shake-up of its fund managers as the firm looks to boost performance and recover from a troubling year in which it has been plagued by questions over its fees and value for customers.
Last year, the company pulled a £2bn emerging markets mandate from Jacob Rees-Mogg-founded Somerset Capital Management, causing the firm to immediately shutter as it had lost two-thirds of its assets.
Investors have also pulled billions from Impax over the last year, as the asset manager struggles with increasing pressure on its shares from short sellers like JP Morgan.
However, the Global Quality Unit Trust represented only 13 per cent of the assets managed by Impax on behalf of St James’s Place. It also has sole control over a more significant mandate with its £5.3bn Sustainable and Responsible Equity fund.
The Sustainable and Responsible Equity fund was assessed as delivering value in its report and has been managed by Impax since 2018.
Peel Hunt analysts Stuart Duncan and Robert Sage estimated the impact on Impax revenue to be less than 45 basis points “reflecting the low margins St James’s Place typically pays managers”, and said they therefore anticipated “the impact on profits will be small”.