Fund manager changes at First State and Stewart Investors

Posted by Liz Rees in Fund and industry updates category on 11 Nov 15

First State

What is changing?

In March 2015 First State Stewart split in two entities in order to preserve the boutique culture of its fund management operations. The Stewart Investors brand now applies to all funds run from Edinburgh while those run in Hong Kong retain the First State Brand. The parent company of both is still Australia’s First State Investments.

Stewart Investors has announced this week that two of the longest serving members of its Asia Pacific and Global Emerging Markets Team will be stepping back from some of their fund management duties.

Angus Tulloch, who is Citywire A rated, will relinquish his fund management responsibilities in a phased handover taking place up to July 2016. Although Tulloch has already turned 65 he has stated he has no plans to retire imminently and remains a key part of the investment team.

Jonathan Asante, also Citywire A rated, recently relocated to Edinburgh following the split of the First State team into two separate operations. Asante changes to co-manager of the Stewart Investors Emerging Market Leaders and Worldwide Leaders funds and will now concentrate on his smaller global equity funds.

The funds affected are detailed in the table below:

Fund name Current manager: co-manager New manager: co-manager
Stewart Investors Asia Pacific Angus Tulloch: Ashish Swarup Ashish Swarup: Angus Tulloch
Stewart Investors Asia Pacific Leaders Angus Tulloch; David Gait David Gait: Sashi Reddy
Stewart Investors Global Emerging Markets Leaders Jonathan Asante: Ashish Swarup Ashish Swarup: Tom Prew
Stewart Investors Worldwide Leaders Jonathan Asante: Stephen Deane Sashi Reddy  & Sustainable funds team
Stewart Investors Worldwide Sustainability David Gait: Nick Edgerton Nick Edgerton: David Gait
First State Latin America Tom Prew: Dominic St George Dominic St George: Tom Prew
All other First State and Stewart Investors funds keep their current managers.

The managers taking on the greatest additional responsibility as a result of this are Citywire AA rated David Gait, and Citywire AAA rated Sashi Reddy who currently co- manage the Sustainability range of funds which have an impressive long term track record. Consequently, Gait will switch from lead to co-manager on one of his smaller mandates, Stewart Investor Worldwide Sustainability Fund, effectively swapping roles with his current co-manager.

The extension of the ‘sustainability’ strategy to the Stewart Investor Asia Pacific Leaders fund will involve applying the following additional considerations to the research process:

  • Identifying companies which address sustainability risks and opportunities
  • Environmental, social and corporate governance issues
  • Engaging with companies on identified sustainability issues
The official statement from First State regarding the changes

‘Stewart Investors’ culture, philosophy and processes are unchanged. Our priority remains to protect client capital and to deliver attractive long-term investment returns. These changes, as with others we have made over the years, must be seen in the context of the broader evolution of our business. We operate in an industry still overly-focused on individuals and our investment approach represents a balance between the collegiate and the individual. We are very much a team, united by one investment philosophy, in how we research companies and make decisions, but we have been equally committed to providing clarity around individual portfolio responsibility. We have no intention of changing that approach, nor of concealing these individual responsibilities behind a faceless committee. Our ambition is to continue to develop talented investors, who will thrive in the particular environment in which we choose to operate.’

The views of our research partners Square Mile

Three of the funds affected by these management changes had been awarded ratings by Square Mile who have reviewed their stance as follows:

Stewart Investors Asia Pacific Leaders: Square Mile are maintaining an AAA rating on this fund. Whilst lead manager Angus Tulloch will be handing over portfolio management responsibility to David Gait (currently the co-manager on the fund) and Sashi Reddy, the upcoming change has not affected their view of Stewart Investors. Mr Gait joined the team in 1997 and is well versed with the intricacies of investment in Asia – as are the other senior members in the team. The Stewart Investors Asia Pacific Sustainability fund, managed by Gait and Reddy, already has an AAA rating from Square Mile.

The process is tightly followed and has been in place for more than two decades; the team all shares the same investment culture, philosophy and mindset, which is founded on the responsible stewardship of capital. Square Mile believes that in practice the management of the fund is likely to change very little. Mr Tulloch will continue as an active member of the investment team and will be co-manager of the Asia Pacific fund, which is managed along similar lines.

Stewart Investors Worldwide Sustainability: Square Mile maintain their A rating on this fund. Manager David Gait will be handing lead management of the fund to Nick Edgerton, who is currently the co-manager. Mr Gait will remain involved with the fund as co-manager. Square Mile believes this subtle change to the management of the team will make very little difference to the way the fund is run on a day-to-day basis. Therefore, they consider the fund to be an attractive choice for the long-term investor who is seeking a global portfolio of quality businesses that are ideally positioned to contribute to and benefit from sustainable development.

Stewart Investors Global Emerging Markets Leaders: Square Mile has decided to suspend the AAA rating on this fund. They had high regard for the lead manager, Jonathan Asante, who will continue to manage the fund until July 2016 before handing it over to co-managers, Ashish Swarup and Tom Prew. Although very familiar with the overall team including Mr Prew, who has been involved in the strategy for some years, they need time to meet Mr Swarup who joined the group relatively recently, in 2014.

The rating will therefore be suspended pending a full review with the new manager. Given the lengthy handover period which has been announced, they have no imminent concerns about the fund, but are keen to meet the new manager in order to form a longer-term opinion.


The view of the Willis Owen research team is that this announcement demonstrates that a carefully planned and phased succession process has been put in place to manage the eventual retirements of the individuals concerned. The new incumbents are highly qualified professionals with considerable experience in their specialist fields and the long established collegiate investment process remains in place.

Ashish Swarup is the only appointment who is relatively new to Stewart Investors, having joined in 2014, but prior to this he spent 10 years at Fidelity Investments initially as an analyst then as a fund manager for 6 years specializing in Emerging Markets. Therefore, we share the opinion of Square Mile that there is no reason to be unduly concerned; if they identify any significant changes in strategy or performance or change their recommendation further we will alert you to this.

Important Information: We do not give investment advice so you will need to decide if an investment is suitable for you. If you are unsure whether to invest, you should contact a financial adviser.