Neptune Restructures Fund Offering

Neptune is closing 40% of funds and radically overhauling its management process to fix ailing performance

Emma Wall 2 February, 2015 | 9:02AM
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Neptune Asset Management is closing up to 40% of its funds and introducing a new investment process in a bid to turn the fractured offering around. The group had come under criticism for ailing performance and a large volume of fund launches run by managers with little market experience.

Founder Robin Geffen has today announced new strategy plans for the group, which include closing a slew of funds and hiring a team of new analysts who will directly assist fund managers. These lead sector analysts will run model portfolios based on their stock recommendations which will then be measured against an industry benchmark.

Addressing past concerns about inexperienced managers, new hires will be required to have already completed their investment management qualifications and have analyst experience. There has also been investment in a new risk management system.

The group has almost completed the fund closures part of the strategy, which recently included closing the Neptune China Special Situations and Neptune Russia Special Situations funds.

Geffen said that the enhancements would “provide our fund managers with better research and contribute to performance across our range”.

“To be sure, it has been a challenging period for Neptune. However, despite this we have enjoyed great stability in our investment team,” he added.

“As an independent, privately-owned boutique we are able to continually iterate our investment process in order to ensure these individuals are able to benefit from the best research. I believe these changes will make an important contribution as we seek outperformance in the years ahead.”

Of the funds available to retail investors, Morningstar fund analysts currently consider three to be Silver Rated, and three Bronze. Analysts cited founder Robin Geffen’s experience and track record as a reason to buy, but when assessing the Parent Pillar in the past, analysts voiced concerns about the sheer volume of funds Neptune offered.

“Since establishing itself in 2002, Neptune has made a significant effort to diversify its asset base away from the group’s flagship global funds managed by its CEO and founder Robin Geffen. Some of the firm’s regionally focused funds have been successful both in terms of performance and inflows, most notably Neptune’s US, Europe and Japan funds,” said Morningstar’s Richard Whitehall.

“However, there are few other examples of a successful broadening of the firm’s fund range as many products have small, uneconomical asset bases in our opinion.”

With these issues being addressed Morningstar’s head of fund research Jeremy Beckwith said that the move was good for investors. 

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Emma Wall  is former Senior International Editor for Morningstar