SWIP axes funds staff in equities overhaul

LONDON (Reuters) - Scottish Widows Investment Partnership (SWIP), the asset management unit of Lloyds Banking Group, is cutting 23 jobs in a strategy shakeup that aims to poach clients from hedge funds and providers of cheap index-tracking products.

The 143 billion pound funds firm has unveiled a new equity investment strategy to prioritise winning business at both extremes of the market - from investors chasing high returns using sophisticated higher-risk funds and those seeking predictable outcomes via computer-driven trading.

Funds that fall outside these parameters and cannot be modified to fit the new house strategy or are no longer economically viable, will be wound up, SWIP said in a statement explaining the overhaul and the subsequent job cuts.

"We remain committed to active fund management in those markets where we have confidence that we can generate strong investment performance and build long-term, valuable relationships with clients. However, for some of our clients, a lower-risk approach to investment is more appropriate for their needs," Dean Buckley, Managing Director of SWIP, said.

News of the restructuring follows a challenging period for "one-stop-shop" asset managers, many of whom are struggling to hold on to investors' cash as the popularity of low-cost exchange-traded products soars.

Industry experts analysing the rush of clients towards such passively managed strategies have predicted substantial redundancies and a wave of consolidation in the UK fund management sector in 2012, as firms battle to grow their assets faster than their costs.

Andrew November, SWIP's Director of Equities, will lead the new strategy, flanked by Will Low in his role as head of Global Equities, which now includes responsibility for UK Small Cap, real estate securities and Absolute Return.

Tony Whalley continues to lead the Equities Dealing team; Anne Fraser continues in her role as head of Governance and Sean Phayre will remain as head of the Quantitative Investments team, which sits in SWIP's Investment Solutions business.

A spokeswoman for SWIP said November and his senior team members would finalise the wider team structure over the coming weeks but some key fund managers were already confirmed to stay, including James Clunie, Gregor Macdonald, Andrew Paisley and Vicky Watson.

The strategies of its Real Estate, Fixed Income and Multi Asset businesses will remain unchanged, the spokeswoman said.

(Reporting by Sinead Cruise; Editing by Erica Billingham)