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Phillips & Drew became a dominant force in UK fund management on the back of a unique investment culture. Now little remains of the old P&D within the new-look UBS Global Asset Management. It still rankles with former employees. But UBS wants to compete on the global stage. And P&D had become a relic of another era. The strange disappearance of P&D says a lot about the changing face of fund management. By Maha Khan Phillips.
January 2000. The chorus of You'll Never Walk Alone, the Righteous Brothers' hit adopted as a football terrace anthem, rises to the vaulted ceiling of the Royal Naval College, Greenwich. Below, dozens of black-tied fund managers are on their feet, their singing voices directed at one man. Tony Dye, chief investment officer of Phillips & Drew, sits at his table, slightly embarrassed but also visibly buoyed by the display of loyalty from his investment staff. It was a moment to savour one of the last for P&D.
Less than three months later, Dye was walking away from the firm very much alone. Dubbed Doctor Doom by the UK media for his extreme, bearish outlook for the tech-led stock market, Dye finally succumbed to pressure and resigned as CIO. UBS, since the mid-1980s the owner of P&D, had tired of successive years of relative under-performance, and grown increasingly fearful of a mass exodus of investors. The fact that Dye's departure coincided almost perfectly with the peak of the stock market bubble, vindicating his bearish stance, was scant consolation to his loyal followers.
Three years on, and Phillips & Drew, once a bastion of the UK fund management industry, no longer exists. The name has gone, subsumed in UBS Global Asset Management. The extreme value philosophy and idiosyncratic process have been discarded, in favour of what the firm calls a research-focused, price-intrinsic value approach. Many of the people serenading Dye that evening have since departed. And a unique investment culture has been destroyed. As one former P&D fund manager says wistfully: "The really sad thing is that one moment we were standing back-to-back, united against the world. The next it was every man for himself."
The global bland
The disappearance of Phillips & Drew says a lot about the changing...