ONE of the most powerful jobs in fund management came up for grabs yesterday when Keith Jones, the chief executive of Morley Asset Management, quit unexpectedly.
Mr Jones announced that he would leave Morley at the end of the year, triggering speculation about his likely successor in one of Britain’s biggest active fund management companies.
Katherine Garrett-Cox, the chief investment officer of Morley, was seen as a possible internal candidate, alongside James Tanner, the sales and marketing chief.
Analysts said that external candidates could include Glyn Jones, a former chief executive of Gartmore, who recently left Thames River Capital, or Richard Horlick, who quit as chief investment officer of Schroders last year and recently set up a boutique fund manager, Spencer House Capital Management.
Paul Manduca, the former head of Deutsche Asset management across Europe and now the senior non-executive director of Wm Morrison, was also mooted as a potential replacement. Anna Mann, of the headhunters MWM, is heading the search.
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Mr Jones, 53, has run Morley for the past seven years, bolting together the two investment management arms of Norwich Union and CGU, when the two parent insurance companies merged in 2000.
He said: “After seven years at the helm I have decided it is appropriate for me to take a short break before taking on new and different challenges in the City.”
An economist by training, Mr Jones is expected to look for non-executive directorships and to devote more time to his passion, skiing.
Morley, which indirectly looks after the long-term savings of millions of British households, manages £157 billion, putting it equal first with Prudential in the UK as an active fund manager.
Analysts suggested that Mr Jones’s departure could herald a strategic change in Morley. It recently started publishing its own financial accounts for the first time, which could be the prelude to a shift in direction or even in ownership structure.
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It achieved a 45 per cent increase in first-half total operating profits to a record £32 million, boosted by rising markets and increased performance fees. Although largely reliant on business from its parent company, it succeeded in boosting external business by 40 per cent to £5.9 billion.
BALANCING ACT AMID MARKET FREEFALL
Keith Jones is credited with the difficult balancing act of bolting together two different fund management businesses while weathering a freefall in stock markets.
While share prices were plunging, and fees shrinking, between 2000 and 2003, Mr Jones combined the fund management businesses of the merging parent companies CGU and Norwich Union. His other coups include the building of a highly successful property fund management arm, now the largest in Europe, taking a leading role in ethical investment products and planting the seeds of a fledgeling hedge fund operation through the acquisition of Orn Capital.
But overshadowing these achievements has been the continued pedestrian investment management performance of the group. According to figures from CAPS, an independent consultancy, Morley’s balanced pension fund performance has been below the industry median over one, three and five years.