Goodbody Stockbrokers has pulled clients out of Pioneer bond funds following the resignation of two high-profile investment managers and the agreed sale of the largest fund manager in Dublin this month.
The move follows a decision earlier this month by Morningstar, an influential US investment funds research and ratings firm, to put some Pioneer bond funds under review in light of both developments.
In a note issued to clients on Monday, Goodbody’s wealth management division said it had decided to move discretionary money it manages out of the Pioneer Euro Bond and Pioneer Euro Corporate Bond Funds and into Bluebay’s Investment Grade Government Bond Fund and the iShares Core Euro Investment Credit ETF.
It is understood the decision relates to about €15 million of investments. The firm noted Pioneer may experience “further pressure on fund flows early next year”.
Meanwhile, Goodbody has also recommended to advisory clients that they make a similar switch.
Rival firm
The Irish Times first reported earlier this month that Pioneer had suspended two executives – Tanguy Le Saout, head of European fixed income, and Ali Chabaane, head of portfolio construction – amid claims both were involved in plans to set up a rival firm. The two men resigned on December 10th, two days before Pioneer's Italian owner, Unicredit, announced it had agreed to sell the fund manager to French peer Amundi for €3.6 billion.
Goodbody said the strategic direction of Pioneer following the takeover “remains unclear”.
"We would expect that some of the people involved may seek to exit the investment team as the situation involves," Goodbody Wealth Management said, noting that Amundi has identified significant cost savings.
Meanwhile, Goodbody said that the resignations of “headline figures” in Mr Le Saout and Mr Chabaane “cannot be ignored”.
Compelling reasons
“We feel it is now prudent to make these changes [in fund allocations] for the compelling reasons we have outlined,” Goodbody said. “We will continue to monitor the Pioneer Funds as the situation evolves over the next 12 months.”
All told, Pioneer manages €226 billion of funds, with Dublin acting as its European headquarters since 1998.
A spokesman for the firm didn’t immediately respond to a request for comment.
However, the asset manager said earlier this month that its European fixed-income team, with over 15 portfolio managers and 24 research analysts, “has the strength and depth” to get through the recent resignations.
Cosimo Marasciulo, who was head of European government bonds, was appointed in recent weeks as head of European fixed income, and Declan Murray, global chief of staff for investments at Pioneer, was given the responsibility of providing "guidance and leadership to the portfolio construction team".
