Jupiter announced this week that ex-Henderson New Star manager Guy de Blonay will co-manage its Financial Opportunities fund with Phillip Gibbs, head of the financials team, starting summer of 2010. De Blonay will join the firm in January 2010 in an advisory capacity. The two managers were previously rivals, running the two highest profile financials funds in the UK. Both have successful track records, although the Jupiter fund held up better in 2008, thanks to an extremely defensive position, with more than 50% of the portfolio in cash and bonds. De Blonay’s addition marks Jupiter’s expansion plans for this team as it also launches two funds: Jupiter A
bsolute Return and Jupiter International Financials. The latter will be similar to the existing Financial Opportunities fund but will allow short-selling of stocks and indices. The Absolute Return fund will be benchmarked against three-month LIBOR and will be managed in a similar style to Gibbs’ existing hedge fund.
Invesco Perpetual to launch investment trust for Martin Walker
Invesco Perpetual will be launching a UK equities split-capital investment trust this month, Invesco Perpetual Dual Return Trust. A second tranche of shares may be issued in February/March of next year. The trust’s structure provides investors a split in returns between income and capital and will have an equal number of income shares and capital shares. The trust will have a seven year life and will be run by UK equity manager Martin Walker. Walker has been with Invesco since 1999. He is experienced in the UK equities space and runs some £1.5bn in assets. He works in the UK Equity team, headed by Neil Woodford, where he started as an analyst before taking a management position on the Childrens fund in Mar 2003. He has amassed a solid record on that fund and has recently taken over the management of Invesco Perpetual UK Growth. We expect there will be significant overlap in the holdings of all three offerings and that Walker will leverage his existing work and his team’s expertise in the running of this trust. Split-cap trusts fell dramatically out of favour after badly burning investors earlier this decade with sizable losses. Although the aggressive structures of that period have faded, the split cap structure still gives investors in capital shares geared exposure to the underlying investments, significantly heightening risk.
Aegon to launch healthcare-themed property fund
Aegon Asset Management is planning to launch a closed-ended healthcare property fund, the Aegon Target Healthcare Property Unit Trust. The fund is designed to capitalise on the retiring baby boomer generation and increasing longevity which will increase the need for specialist care facilities. It will therefore invest predominantly in care homes, with investments in other related areas such as day surgeries and critical care facilities made on the periphery. The trust’s life will be five years plus a three year wind down period. It will be managed by Aegon’s property team of Phil Clark, Gerardine Davies and David Wise. Such specialised investments are rarely needed by individual investors in our view.
Jupiter North American Equities Sicav launched this week
Jupiter Asset Management has launched a Luxembourg-domiciled fund for Sebastian Radcliffe this week, Jupiter North American Equities. Radcliffe will run the new offering in a similar fashion to his UK-listed Jupiter North American Income fund, which he has been running since January 2001. Radcliffe has done an excellent job over his tenure, driving the fund to impressive returns. He has managed to outperform in both up and down markets and has outpaced his average rival in the Morningstar US Large-Cap Blend Equity category in every calendar year since 2002. The fund ranks in the top-decile of its Morningstar US Large-Cap Blend Equity category over three and five years annualised. Radcliffe has delivered 5.9% on average each year over the last five years compared with a much smaller 1.6% for his average category peer.
F&C’s Seabrook to work alongside Luis on Strategic Bond and Extra Income Bond
F&C’s co-head of UK credit, Rebecca Seabrook has been appointed to co-manage the firm’s two largest retail bond funds, F&C Strategic Bond and F&C Extra Income Bond alongside manager Fatima Luis. Seabrook is currently the lead manager on F&C Ethical Bond, rated Standard by Morningstar. We think she’s skilled and has a lot to offer beyond an ethical universe. Luis has been responsible for the F&C Extra Income Bond fund since its inception nearly a decade ago, and has run F&C Strategic Bond (awarded a Standard rating by Morningstar) since 2004. She is also at the helm of F&C Maximum Income Bond. Luis has delivered mixed results across the three offerings so we view the addition of Seabrook as a further resource as a positive step.
Gartmore prepares to float on the LSE next month
Gartmore has today announced its plans to float on the London Stock Exchange in December. It will use the capital to help reduce its debt and facilitate an exit for its majority owner, Hellman & Friedman (the American Private Equity house). H&F backed a management buyout in May 2006 and paid £550m for a 58% stake in Gartmore, outbidding Schroders and Henderson. A price tag has yet to be mentioned this time and although its £21bn AUM (to 30 Sept) may be a good indication, it’s difficult to tell since valuations in the sector have become depressed. Insight, for example, which had some £74bn in assets under management only managed to secure £250m for its business which it sold to HBOS this summer. Gartmore employees are in for significant rewards given that they own a 50% stake in the business. Roger Guy, for example, has a noteworthy £80m tied-up. That said, employees will sell a fifth of their holdings, with the remaining shares subject to three-year lock-in arrangements.
Midas to merge cautious funds
Midas is planning to merge the CF Miton Cautious Income fund with CF Miton Global Income Portfolio next year. Sam Liddle has run the UK Equity Cautious Income fund since 2003 and had been a consistent top-quartile performer in his Morningstar Sterling Cautious Balanced category until the start of the credit woes in 2007. Liddle struggled mightily in the latest downturn and this has dented his fund’s performance record. To the end of Oct 09 the fund has resided in its Morningstar category’s bottom decile over three and five years. The manager notes the benefits of picking high-yielding stocks from a much larger, globally equity universe relative to a narrower and more restrictive subset of UK equities. Granted, there may be more opportunities in the global equities realm but investors who were holding the fund as a core UK equity holding may not find global exposure to fit within their asset allocation plans.
Morningstar qualitative ratings and reports issued this week
Morningstar issued new qualitative ratings and reports on a number of funds available to UK investors this week, including AXA Rosenberg European, Rathbone Income and Schroder Income. Click here to see the full list.
