Wealth Manager - the site for professional investment managers

Register to get unlimited access to Citywire’s fund manager database. Registration is free and only takes a minute.

Tidjane Thiam: I was wrong about the ‘magician’ Woolnough

Tidjane Thiam: I was wrong about the ‘magician’ Woolnough

Prudential chief executive Tidjane Thiam admitted he underestimated the ability of M&G bond star Richard Woolnough and his colleagues to generate such major interest on the continent.  

Thiam made a guest appearance at M&G’s annual investment conference and lauded the M&G Optimal Income fund manager, affectionately dubbed the ‘magician’ by the firm’s Paris office, while paying credit to the investment and distribution effort at Prudential's asset management subsidiary.

‘I told them it was not going to work but we can see the results,’ Thiam said. 'It’s the first time in my life I was happy to be wrong.’

Woolnough’s Optimal Income strategy has swelled to €22.7 billion (£18.8 billion) and is M&G’s best-selling product across the continent.

Citywire A-rated Woolnough told the conference it had been a tough time for bond fund managers, but suggested there were signs the bear market in the asset class could be coming to an end.

‘[At the moment] there’s not a single bond fund manager in the world that likes bonds,’ Woolnough said.

’30-year bond yields are the cheapest they’ve been in 15 years and when yields get to 4% we would think the bear market has been priced in.We’re not there yet but hopefully we’ll get there soon.’

Overnight the Treasury Department auctioned $13 billion-worth 30-year bonds at 3.525%.

Woolnough also explained why he had cut his equity exposure, which ran close to its limit last year as he sought to protect the fund’s income.

‘There was lots of value in equities in 2012. I’m an equity tourist – if they’re attractive I buy them and if I don’t see value I won’t buy them.’

Last week it was rumoured Woolnough was the mystery recipient of a £17.5 million pay reward from Prudential in 2013.

The Opitmal Income fund, which launched in December 2006, has returned 87% in the five years to the end of March versus a 73% rise in the benchmark.

The fund's maximum drawdown of 3.03% is the second best in it peer group, which contains 43 funds with a five-year track record.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Play On the Road Challenge: Clay pigeon shooting with Thesis' Lansdowne

On the Road Challenge: Clay pigeon shooting with Thesis' Lansdowne

Eleanor Mahmoud goes clay shooting at the National Clay Shooting Centre with Sam Lansdowne from Thesis Asset Management

Play AA-rated Flood on gov't bonds: 'the maths doesn't add up'

AA-rated Flood on gov't bonds: 'the maths doesn't add up'

He also addresses why his Newton Multi-Asset Income fund has such a high cash weighting and why he sees renewables as such a good opportunity.

Play AAA-rated Ali: Identifying the peripheral European plays

AAA-rated Ali: Identifying the peripheral European plays

Citywire AAA-rated Tawhid Ali thinks that plenty of good stocks in the European periphery are being thrown out with the proverbial bath water.

Read More
Your Business: Cover Star Club

Profile: 'for the first time since 1981, I have to watch politics'

Profile: 'for the first time since 1981, I have to watch politics'

James Hambro & Partners’ William Francklin says he is having to factor politics into his thinking for the first time in his 36-year career

Wealth Manager on Twitter