Legal & General Investment Management has announced the departure of Richard Hodges, ending a seven-year period at the UK-based asset manager during which he has run a suite of funds. His departure was described as a “huge blow” by one independent financial advisor.

Legal & General Investment Management has announced the departure of Richard Hodges, ending a seven-year period at the UK-based asset manager during which he has run a suite of funds. His departure was described as a “real blow” by one independent financial advisor.

Hodges’ planned departure date from the company is October 2014. He has been with the company since 2007 and is lead manager on the Legal & General Dynamic Bond Trust and interim lead manager on the Legal & General Fixed Interest Trust, Managed Monthly Income Trust and the Sterling Income Fund (UK corporate bond funds), L&G said in a statement yesterday.

Martin Reeves, senior fixed income fund manager, will assume responsibility for the Dynamic Bond Trust. Reeves will work with Hodges over the coming months to transition the fund. The pair already work together at a strategic level and on individual security selection, the firm said.

Hodges will also transition the UK corporate bond funds to LGIM’s UK institutional credit team headed by Robert Barnard-Smith. The team manage around £12 billion ($20.2 billion) in UK corporate bonds on behalf of institutional clients.

“We are of course saddened to see Richard leave after seven years at LGIM and he carries our very best wishes for success in the future,” Roger Bartley, head of fixed income, LGIM, said in a statement. He added: “Martin [Reeves] brings a huge wealth of experience to the lead management of the Dynamic Bond Trust, a fund that he knows exceptionally well.”

Chelsea Financial Services, an IFA, was downbeat about the announcement, and said it will cut its recommendation on the Dynamic Bond Fund.

"Richard Hodges' resignation is a real blow to L&G. The fixed income team is well-resourced, but Richard was the stand-out manager,” Darius McDermott, managing director at Chelsea Financial Services, said.  

"The fund has been one of our favourites in the sector for a number of years and Richard's total return mentality was particularly attractive to bond investors who, in the current environment, are keen to preserve capital as interest rates rise. We've downgraded the fund to a hold with immediate effect,” he said.

Trustnet, which provides data and commentary on fund managers and their performance, said Hodges' funds were “performing better than the peer group composite. Over a fairly lengthy track record, the manager has outperformed the peer group more often than not. Good stock-picking has had a material positive impact on results, which have not been particularly exposed to falling markets”.