Gary Potter and Robert Burdett to manage fund of funds called Constellation
Credit Suisse Asset Management is to launch a fund of boutique-style funds called Constellation to be run by Gary Potter and Robert Burdett.
Each fund invested in will be 'boutique by company or by nature' and the portfolio is to be a collection of star fund managers selected on a purer bottom up basis than other fund of funds offerings which, the group argues, are to a large extent asset allocation led.
Constellation aims to give intermediaries access to a diversified basket of new talent and managers that have left mainstream investment houses as well as exposure to small, agile funds far less constrained by benchmarks than larger portfolios.
Constellation has a minimum investment of £1,000. It has an initial charge of 4%, annual management charge of 1.5%, 3% initial intermediary commission and 0.5% renewal.
The launch of Constellation is part of Credit Suisse's strategy to secure Pep and Isa transfer business. Its launch will be accompanied by two other fund of funds run by Potter and Burdett which will have a more familiar managed fund look. Constellation will invest in between 20 and 35 boutique-style funds, aiming to give diversity and offer intermediaries an alternative to specialist or sector funds when investing the high growth potential portion of their clients' portfolios.
The fund will be primarily equity based, however, Potter and Burdett have the ability to invest in high yield and other asset classes.
Constellation will be selected using the same 16 factor scoring process used for Burdett and Potter's other portfolios.
Potter said: 'We are seeing a brain drain going away from the larger groups to smaller boutique operations. This is our answer to how intermediaries can gain positive exposure to that effect.'
Burdett said Constellation would have access to managers otherwise unavailable or unknown to the advisory community. He added some names would be more familiar and the portfolio could include Liontrust or ABN Selected Opportunities in the UK, Thames River in Europe and Polar Capital in technology.
Since joining Credit Suisse from Rothschild Asset Management, Potter, Burdett and Kelly Prior have been researching a condensed universe of around 240 potential funds for Constellation.
Burdett said: 'In the past managers leaving major businesses went to set up hedge fund businesses. Now we are seeing people setting up a long only limb as well. Why? The rise of multi-manager and the pension fund industry moving towards having a core index-tracking element and specific mandates around that mean it is a good way for new businesses to get assets under management.'
Although it is not the first fund of boutique funds to be offered, Hargreaves Lansdown launched the HL Boutique Trust in April, it is the first that will be directly marketed to intermediaries. The Hargreaves unit trust is not marketed but used as a vehicle for its wealth management service.
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