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Absolute return fund closed as former giant dwindles

Absolute return fund closed as former giant dwindles

Aberdeen Standard Investments is to close the Ignis Absolute Return Government Bond fund after the once-giant bond strategy’s assets fell below an economically viable level.

The Luxembourg-domiciled fund was absorbed into Standard Life Investments when the asset manager purchased Ignis in March 2014. It stood at €4.9 billion in assets at the time of the purchase.

The move prompted wholesale changes in the management of the fund, as the bulk of the team under Russ Oxley opted to join Old Mutual Global Investors just six months after the deal was completed.

Portfolio managers Shayne Dunlap, Stuart Thomson and Richard Marshall were handed the Alt Ucits fund following the team’s exit and ran it until Aberdeen Standard announced plans to close it in a recent shareholder note.

It is understood that assets in the fund have now fallen to £150 million (€167 million), which Aberdeen Standard views as not a suitable level to keep it operational.

In a statement, a spokesperson for the company told Citywire Selector: ‘It has been decided to close the Ignis Absolute Return Government Bond Fund and return money to underlying investors.

‘The fund size is now insufficient for the fund to operate in an economically efficient manner. Whilst this fund is closing, other multi-asset strategies in the combined business continue to attract interest.’

It will be formally closed on 22 December. Subscriptions were stopped on 20 November.

On a three-year absolute return basis to the end of October 2017, the fund lost 3.8% in euro terms, which compares with a 2.8% return by the average fund in the Alt Ucits – Bond Strategies sector over the same period.

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