News that small-cap veteran Harry Nimmo will head up the ASI Global Smaller Companies fund after the departure of former manager Alan Rowsell should act as a source of reassurance for investors in the £1bn fund, according to experts.
It was announced last week that Rowsell is to leave Aberdeen Standard Investments after 14 years; the manager was on the Standard Life Investments side of the merged business for the bulk of this period and launched ASI Global Smaller Companies in January 2012.
Rowsell will be joining Premier Miton Investors to launch a new global smaller companies fund. Imogen Harris, an investment analyst in his team at Aberdeen Standard Investments, will be joining with him.
FE fundinfo Alpha Manager Nimmo – who runs the flagship ASI UK Smaller Companies fund – was a co-manager on the global strategy from launch until he stepped down in late 2016, leaving Rowsell as sole manager.
While Nimmo worked on ASI Global Smaller Companies fund it made a total return of 102.03 per cent, outperforming the IA Global peer group (67.31 per cent).
Performance of fund vs sector under Harry Nimmo
Source: FE Analytics
Upon his return Nimmo will be working alongside co-manager Kirsty Desson, who has been a part of the ASI Smaller Companies Team for eight years.
Commenting on both Nimmo’s return and Rowsell’s departure, FundCalibre managing director Darius McDermott said: “It’s a shame that Alan is leaving, but the fund could not be left in better hands.
“Harry was the co-manager at launch and has considerable experience and success running smaller companies’ funds. Co-manager Kirsty Desson was appointed relatively recently but has been involved in the fund for some time.”
Rowsell used the Matrix tool that Nimmo built as part of the process for ASI Global Smaller Companies, as well as the 'Focus on Change' philosophy that is used by the group’s smaller companies team.
It is worth noting however that FundCalibre has had to strip the ASI Global Smaller Companies fund of its Elite Rating because it was based on Rowsell’s performance. However, the firm said this is not a commentary on Nimmo’s appointment or expectations surrounding his capability to run the fund.
In fact McDermott pointed out that the fund will continue to be run using the same process, adding “because we have confidence in Harry and Kirsty’s fund management skills, we will move the fund to an Elite Radar until a new three-year track record has been achieved”.
AJ Bell head of active investments Ryan Hughes agreed that while the departure of Rowsell came “as a bit of a surprise”, the good news for investors is that the fund is being left with a strong team and process.
“The fact that the hugely experienced Harry Nimmo has been re-appointed to the fund to work alongside Kirsty Desson is a positive given how he has managed the fund previously and been leading the small cap team until very recently,” Hughes said.
“As a result, he has first-hand knowledge of the approach and should bring important continuity to the fund.”
While Nimmo stepped down from managing the ASI Global Smaller Companies fund several years ago, he runs the £1.7bn ASI UK Smaller Companies fund and the £498.3m Standard Life UK Smaller Companies trust, both of which hold an FE fundinfo Crown Rating of four.
Performance of fund vs sector under Harry Nimmo
Source: FE Analytics
He also co-manages the new ASI Global Mid Cap fund, which was launched in April this year. This fund shares the same investment philosophy and process as the rest of the smaller companies range.
Nimmo stepped down as ASI’s head of smaller companies in February after 27 years in order to have a greater focus on portfolio management. Hughes said this could be beneficial given the number of strategies he is now working on.
“As a result of the strength of the team and the involvement of Nimmo, we remain comfortable keeping the fund on our Favourite funds list,” Hughes said.
But there are some concerns to bear in mind, according to Ben Yearsley, co-founder of Fairview Investing.
Yearsley thinks that “if you are already an investor in this fund, the announcement should cause no concern”, as Nimmo has a long and strong track record both with the fund and in the small-cap space.
But Yearsley added that Nimmo’s re-appointment to the fund may not be permanent: “Obviously ASI need to recruit to replace as strength in depth is important.
“One issue I suppose is that Harry also co-manages the recently launched Global Mid Cap fund – will this blur the lines between the funds?
“The other thing I would say is this is probably not a long-term solution as Harry has already given the fund up once.”
But bearing that in mind, Yearsley was still positive overall at Nimmo’s return to the fund, adding “however if you are an existing investor there is no need to sell”.
Since the ASI Global Smaller Companies fund launched, it has made a total return of 219.77 per cent, outperforming its IA Global peer group (127.61 per cent).
Performance of fund vs sector since launch
Source: FE Analytics
The fund has an ongoing charges figure (OCF) of 1.05 per cent.