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Graham French to depart M&G

Graham French to depart M&G

(Update) M&G's renowned Global Basics manager Graham French is to retire from M&G, Wealth Manager can reveal.

His deputy manager Randeep Somel will take over the Global Basics fund following French's retirement which is effective from today, marking an end to the fund manager's 25-year career at the firm. M&G said there will no change to the way the £4.3 billion fund is managed.

It will remain an unconstrained, conviction-led portfolio with around 60 stocks.

His departure follows a period of underperformance with the M&G Global Basics fund, with a 4.7% return over the past three years versus a 33.2% rise by its composite benchmark.

French,who has managed the fund since November 2000, said: 'After nearly 25 years with M&G, the time has come to pass the baton to the next generation of fund manager. I can retire in the knowledge that I leave the shareholders in Global Basics in the very capable hands of Randeep.

'Randeep and I have worked alongside each other for more than five years. He knows the portfolio intimately and is therefore ideally placed to be the next steward of the Global Basics concept of thematic investment.'  

He added: 'I will be available to Randeep as an adviser for the next six months, but he is now firmly in the driving seat. I will be watching closely, not least because much of my own pension remains invested in Global Basics.' 

Deputy manager of the M&G Global Basics Fund since 2010, Somel is another home-grown global equity fund managers at M&G alongside Matthew Vaight, manager of the £1.2 billion M&G Global Emerging Markets fund, and Stuart Rhodes, manager of the £7.6 billion M&G Global Dividend fund.

Somel has been part of the global team since he joined M&G nearly nine years ago.

He stepped down as lead manager of £1.3 billion M&G Managed Growth in July, leaving deputy manager Somel to take the reins.

In a recent interview with Citywire Selection in October, the veteran apologised to investors for underperformance on the Global Basics fund last year, as his fund continued to suffer sustained redemptions.

He told investors it was the first time in 12 years that the fund had seen redemptions.

The fund reached a peak of over £6.6 billion in June 2011 but has gradually fallen away after a period of underperformance.

As recently as March of this year the fund stood at £5.5 billion, but by the end of September 2013 it had fallen to £4.4 billion.

In October he explained the sharp period of underperformance came after a huge drop in the share price of core holding, global services group G4S, and a collapse in commodity prices affecting holdings such as Iluka Resources. 

‘Last summer G4S was a disaster and it took 2% off performance after it collapsed on the Olympics debacle,’ he said.

‘It was a difficult May and June 2012 and we apologise. My money and my parents’ money is in the fund and I’m sorry that I misjudged the depth of the management of G4S.’

Healthcare is currently around 8% of the fund, but French said he expects it to gradually increase to 15%-20% as the developing world continues to inherit the health problems of the developed world.

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Randeep Somel
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234/271 in Equity - Global Equities (Performance over 3 months) Average Total Return: 0.15%
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