Columbia Threadneedle has revealed plans to transfer the assets of European clients currently in its range of UK domiciled funds into the equivalent Sicav products domiciled in Luxembourg.
The company said this is due to fears about the UK leaving the European Union.
As FTAdviser previously reported, the UK government's secretary of state for exiting the EU, David Davis, has refused to guarantee the status of the financial services sector as part of any new arrangement with the EU.
Clients of 20 Columbia Threadneedle funds, including the £4.4bn UK Equity Income fund, which is run by Richard Colwell, will be switched into the offshore versions of the same funds.
All clients are being switched to funds managed by precisely the same fund manager as previously, and will pursue the same investment strategy.
The relevant regulators in the UK and Europe have been informed of Columbia Threadneedle's intention to move.
Michelle Scrimgeour, chief executive for Europe, Middle East and Africa at Columbia Threadneedle, said: "Our priority is to provide certainty and continuity for our clients.
"By facilitating the transfer of European customers to our existing Luxembourg range we will ensure they can continue to access our best investment strategies in a Ucits-compliant fund, regardless of the final agreement between the UK and the EU. For EU investors, the transfers will remove uncertainty regarding the future status of their investment in their home country.”
The funds will be switched between May and September, with investors receiving further information prior to any switch being made.
In total, the funds being managed equate to £6.2bn in assets. Minesh Patel, an adviser at EA Solutions in London., said "this is an interesting development. It is the first of the major providers taking action to protect their clients from disruption.. Quite a number of the funds on that list are top performers, and this action is designed to protect those mandates, so they can continue to do what they have been doing to achieve that performance".
The full list of funds affected is:
Impacted funds
Threadneedle Fund | To | Threadneedle (Lux) Fund | |||
Threadneedle Pan European Smaller Companies Fund |
| Threadneedle (Lux) – Pan European Smaller Companies | |||
Threadneedle Credit Opportunities Fund |
| Threadneedle (Lux) – Credit Opportunities | |||
Threadneedle European High Yield Bond Fund |
| Threadneedle (Lux) – European High Yield Bond | |||
Threadneedle Pan European Fund |
| Threadneedle (Lux) – Pan European Equities | |||
Threadneedle European Corporate Bond Fund |
| Threadneedle (Lux) – European Corporate Bond | |||
Threadneedle Pan European Equity Dividend Fund |
| Threadneedle (Lux) – Pan European Equity Dividend | |||
Threadneedle European Smaller Companies Fund |
| Threadneedle (Lux) – European Smaller Companies | |||
Threadneedle Global Equity Income Fund |
| Threadneedle (Lux) – Global Equity Income | |||
Threadneedle Global Extended Alpha Fund |
| Threadneedle (Lux) – Global Extended Alpha | |||
Threadneedle American Smaller Companies Fund (US) |
| Threadneedle (Lux) – American Smaller Companies | |||
Threadneedle Global Select Fund |
| Threadneedle (Lux) – Global Select | |||
Threadneedle American Extended Alpha Fund |
| Threadneedle (Lux) – American Extended Alpha | |||
Threadneedle European Select Fund |
| Threadneedle (Lux) – European Select | |||
Threadneedle UK Fund |
| Threadneedle (Lux) – UK Equities | |||
Threadneedle American Fund |
| Threadneedle (Lux) – American | |||
Threadneedle American Select Fund |
| Threadneedle (Lux) – American Select | |||
Threadneedle UK Equity Income Fund |
| Threadneedle (Lux) – UK Equity Income | |||
Threadneedle UK Absolute Alpha Fund |
| Threadneedle (Lux) – UK Absolute Alpha | |||
Threadneedle Global Emerging Markets Equity Fund |
| Threadneedle (Lux) – Global Emerging Market Equities | |||
Threadneedle Asia Fund |
| Threadneedle (Lux) – Asia |
Minesh Patel, an adviser at EA Solutions in London, said Columbia Threadneedle's move was "an interesting development."
He said: "It is the first of the major providers taking action to protect their clients from disruption.
"Quite a number of the funds on that list are top performers and this action is designed to protect those mandates, so they can continue to do what they have been doing to achieve that performance."
david.thorpe@ft.com
