assets under management in the north american equity fund rises by £17m after vontobel takes over management
Assets under management in Close Finsbury's North American Equity fund have risen from £3m to almost £20m over the past four months after the mandate was awarded to a new manager.
Management of the fund, which has just been assigned a new AA rating by Standard & Poor's, was handed over to US-based firm Vontobel Asset Management on 1 February this year.
Alastair Smith, managing director at Close Finsbury, said: 'Since we appointed Vontobel we have been doing a lot of marketing to fund of fund businesses and the vast majority of the new investment which has come into the portfolio since February has come from that marketplace. Currently the fund size has grown to a level just shy of £20m and it still has more potential fund of fund investors looking at investing.'
The fund was originally launched in September 1998 and, prior to Vontobel, was managed by US company Jameson Eaton Wood, which employed an index-plus style.
Smith said while the company did a good job, it ultimately was not suitable for a market which needed a more selective stockpicking approach.
'I am expecting our North American Equity fund to grow further. By the end of the year I hope to have somewhere in the region of £50m invested in the fund and I do not think that is an unrealistic prediction,' he said.
The attraction of the vehicle has been the stockpicking style of Vontobel, which uses a very concentrated approach, along with the track record of the fund's current manager, Ed Walczak, who has very strong buy and sell disciplines, according to Smith.
Walczak said he likes simple business models and seeks out companies which are well established while avoiding those with high levels of debt and cyclical market exposure.
He said: 'We look for highly competitive companies with a strong turnaround of capital which must be at the right price but there are not many companies around we find fitting our criteria. For example we like Walmart, but it has never been at the right price. Realistically there are less than 100 companies we would invest in. It is a pure bottom-up, individual stock selection strategy.'
His investment strategy owes nothing to top-down themes, market forecasts or benchmarking, in contrast to the style of the fund's previous manager.
Walczak instead prefers to take what he describes as 'the Warren Buffet approach, where the investment risk is in the business itself and nothing else.'
The recent inflow of new investment means the fund is 87% invested, a level Walczak described as 'a little low.'
He added: 'Typically I would have around 93% of a fund invested. The fund averages about 25 holdings, it has been as low as 19 and as high as 30. Currently it has 26 and the average length of time we tend to hold a stock is three years.'
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