Dampier expects there to be a big announcement following the shock departure of Schroders’ Richard Buxton (pictured right) to Old Mutual last week, but warns an acquisition on this scale could become "messy".Julie Dean is being tipped by some to fill the void left by Buxton and head up the Schroder UK Alpha Plus fund.
However, Dampier is doubtful that the transition will be a smooth one.
"If this were to happen, you’ve got a lot in the melting pot," he said. "Most M&As usually result in fund managers leaving."
"I said Julie Dean (pictured below left) could be a likely replacement for Buxton last week, but is it going to be that easy?"
"The [Cazenove] UK Opportunities fund has been very successful – is she really going to walk away from it that easily?"
"You would have thought that Schroders started these talks long before Buxton left, but you never know with fund management companies.""To be fair, it was only a matter of time before Cazenove was going to float, so [Buxton’s departure] could be seen as a good excuse," he added.
Dampier has not yet taken any funds off Hargreaves’ Wealth 150 list as a result of these reports, but says he is watching developments closely.
"My normal view of buy-outs is not that they’re not very positive for funds," he added.
Dean’s Cazenove UK Opportunities fund has been one of the standout performers in the IMA UK All Companies sector in recent years, and inflows have poured in as a result.
FE data shows that the fund has grown from £317m to £1.2bn in the last 12 months alone.
Performance of funds vs sector and index over 5yrs
Source: FE Analytics
Dean’s fund has significantly outperformed Buxton’s much larger Schroder UK Alpha Plus portfolio over one, three, five and 10 years, with less volatility.
Among the other funds at Cazenove that could be under threat if Dampier’s concerns are justified are Cazenove UK Smaller Companies and Cazenove Absolute UK Dynamic, which are both headed up by FE Alpha Manager Paul Marriage.
Robin McDonald and Marcus Brooke’s multi-manager range is also very popular with UK investors. Cazenove Multi-Manager Diversity now has more than £1bn in assets under management (AUM).
Juliet Schooling-Latter, head of research at Chelsea Financial, says she too is wary of the proposed deal, and fears top-rated funds could lose their star managers as a result.
"There’s always the danger that a group buys another group to get access to their talent, but then the talent walks because they don’t want to be bought," she said.
"If it comes off for Schroders, then it’s very good news. Cazenove managers will fill some very obvious gaps."
She points to Paul Marriage and Julie Dean as the two shining lights at Cazenove.
"The announcement does seem a bit strange though. You’d assume that the two groups were in talks before Buxton left, but why would Schroders look to buy a group for their UK talent if he was still there?" she added.
Schroders has until mid-April to make an offer for Cazenove. With talks still ongoing, neither group is willing to comment on the proposal.