Funds blow

Baillie Gifford follows Abrdn and lays off workers

Consumers are changing their investment preferences

Baillie Gifford is expected to lay off “dozens” of staff following a decision to close four fixed-income funds.

The Edinburgh-based fund manager’s decision is the latest blow to the city’s financial services sector following news of 500 job losses at Abrdn and the plan by Sainsbury’s to withdraw from banking.

Baillie Gifford, whose planned move this spring from its HQ in Leith Street to new offices in Haymarket has been delayed until later this year, is closing three funds from its Irish UCITS fund range.

They are the Worldwide Global Strategic Bond fund, Worldwide European High Yield fund and Worldwide Sustainable Emerging Markets Debt fund, as well as the UK OEIC Emerging Markets Bond fund.

According to letters to shareholders seen by Investment Week, the Worldwide European High Yield and Worldwide Global Strategic Bond funds are due to close on 29 February, while the Worldwide Sustainable Emerging Markets Debt and UK OEIC Emerging Markets Bond funds are will close on 22 April.

The four funds have less than £50 million of (external) client assets compared with over £2 billion of direct fixed Income assets under management. 

A spokesperson from Baillie Gifford declined to provide a precise number for the expected job losses, but said: “As part of our regular business planning, we consider how to reduce our expenditure.

“However, our partnership structure ensures we can continue to invest in growing areas of the business while pursuing excellent long-term returns for our clients.”

Analysts say Abrdn and Baillie Gifford are victims of a shift away from active investing as easily accessible information and education is increasingly available to consumers.

In a social media post, Gordon Wilson, managing director of Carbon Financial Partners, said: “More informed investors will continue to leave traditional active managers in their droves – quality independent data & research (is) easy to find when you start to look.

“Traditional active management simply does not work – that’s factual, not an opinion.

“Opinions are what the traditional businesses base their decisions on and that’s bad for your wealth. Most fail and you can’t pick the winners in advance.”

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