On 10^th August 2017, Kames Capital announced that David Roberts, head of fixed income and Phil Milburn, head of fixed income investment strategy, would both be leaving the company. 

Stephen Snowden, current head of credit, and Adrian Hull, currently a senior fixed income specialist, have been appointed co-heads of fixed income.

Kames Strategic Bond fund, Kames Investment Grade Bond fund and Kames High Yield Bond fund currently feature on The Adviser Centre’s Recommended list.  Below, we summarise the immediate effect of these departures on the three funds:

• Kames Strategic Bond: At the portfolio management level, this fund is impacted most directly by the departures. Messrs Roberts and Milburn were both named managers on this fund, alongside Juan Valenzuela.  Mr Valenzuela remains as co-manager on the fund. Alexander Pelteshki, who joined Kames Capital in 2014, has been appointed co-manager of the fund alongside Mr Valenzuela.  Colin Finlayson remains as support manager on the fund.  Jack Holmes, who joined Kames Capital in 2016 from Standard Life Investments, will provide additional support.
• Kames Investment Grade Bond: Mr Snowden and Euan McNeil continue as the fund’s co-managers.
• Kames High Yield Bond: Mr Milburn was co-manager with David Ennett, Head of High Yield. Mr Ennett will continue to run the fund, working alongside Stephen Baines, Jack Holmes and the broader Kames fixed income team.  Mr Ennett joined Kames Capital in September 2016 from Standard Life Investments, where he managed the Standard Life Investments Higher Income fund, which we previously featured on our Recommended list.

Our current perspectives

Following this announcement, we are retaining the three funds on our Recommended list.

As we indicate above, at the portfolio management level, Kames Strategic Bond is impacted most directly by the departures and we will be conducting a full review of this proposition in the coming weeks.  We have met with Mr Valenzuela and Mr Finlayson on several occasions in our regular reviews of the fund.  Based upon our knowledge of the managers and the established investment approach, we are retaining the Recommended status of the fund for the time being, but naturally, this fund will be under particular scrutiny.

We are more comfortable retaining the Recommended endorsement for Kames Investment Grade Bond.  Nonetheless, we will be conducting discussions with Kames Capital regarding Mr Snowden’s new position and how he will work with Mr Hull in their roles as co-heads of fixed income.

Similarly, we are happy to retain Kames High Yield Bond’s Recommended status.  We have known Mr Ennett for several years at Kames Capital and previously at Standard Life Investments.

Clearly, the departures of Messrs Roberts and Milburn is a significant event and we do not under-estimate its importance.  For many years, they were at the heart of Kames Capital’s renowned fixed income franchise.  More positively for the remaining team, their legacy is a well-honed investment philosophy and process and a collegiate approach to managing the firm’s extensive suite of funds.

The shape of Kames Capital’s fixed income proposition under its new leadership will be a key consideration during this period of change.