CFS reviews Ironbark mandate

Colonial First State (CFS) is reviewing its mandate with Ironbark Asset Management, which recently decided to sever ties with Royal London Asset Management (RLAM), whose former investment team left to set up a new Pinnacle Investment Management affiliate.

Upon receiving news the global equities team will leave RLAM to join Pinnacle in May, CFS told investors that it instructed RLAM to manage its assets on a "care and maintenance basis until a decision had been made about the future management of the funds."

CFS is the issuer and Responsible Entity of the Ironbark Royal London Concentrated Global Share Fund and Ironbark Royal London Core Global Share Fund. The two funds are available on the CFS FirstChoice and CFS Edge platforms.

Both funds are managed by RLAM under a sub-delegation arrangement with Ironbark, meaning that the CFS mandate is ultimately with Ironbark.

"We confirm that the fund's portfolio exposures under the previous full team have largely remained in place while a process to consider any change of investment manager is underway," CFS wrote to investors yesterday.

On August 22, Ironbark announced it will tear up its contract with RLAM, whose former head of equities, Peter Rutter, is now spearheading Life Cycle Investment Partners as an affiliate of Pinnacle, which acted as investment manager of two funds of the same name - the Ironbark Royal London Concentrated Global Share Fund and Ironbark Royal London Core Global Share Fund.

The Concentrated Global Share Fund had $2.2 billion in assets, while the Core Global Share Fund had about $642 million. Ironbark's two funds are separate to the ones issued by CFS.

Ironbark said it anticipated Rutter and his investment team would be able to manage its funds within their new structure by late August.

However, while Ironbark had been working closely with Pinnacle, it came "to understand that Peter and his investment team will not be in a position to manage the funds within a timeframe that Ironbark considers to be in the best interests of investors."

Consequently, it appointed Brown Advisory to manage the Concentrated Global Share Fund and Robeco to oversee the Core Global Share Fund.

Meanwhile, CFS said: "The CFS issued funds named above are distinctly separate from the Ironbark Funds and CFS will consider decisions about the future management of its funds separately to Ironbark."

"CFS is listening and taking feedback from financial advisers and other professional investment researchers and in the midst of reviewing several candidate managers."

Ironbark flagged it intends to appoint a transition manager in the coming weeks to support an orderly changeover of the funds' assets to the incoming investment managers.

The transition to Brown Advisory and Robeco is expected to take place in late September.

"Royal London continues to manage the funds on a 'care and maintenance' basis during this interim period," Ironbark said.

In the same vein, CFS said it is "closely monitoring the portfolios and have no concerns with RLAM continuing on a care and maintenance basis until a decision is made."

Editor's note: The original version of this article incorrectly stated that CFS was reviewing its mandate with Royal London Asset Management and Life Cycle Investment Partners.