Emerging markets specialist, BDT Invest which is chaired by the founder of GT, Richard Thornton, ...
Emerging markets specialist, BDT Invest which is chaired by the founder of GT, Richard Thornton, is set to launch its first retail fund.
The BDT Invest Global Fund will be run as an absolute return fund, investing in both global emerging markets and Japanese equities without being benchmarked to a particular index. If the managers feel there are not enough investment opportunities in the markets, they have the freedom to retreat to fixed interest investments, typically short-term US treasuries.
Unusually for a long-only fund, there will be a 10% performance charge. However, this will be subject to a compound 10%pa performance hurdle and a high watermark.
There will be management fees of 1.5% on the retail share class and 0.9% on the institutional share class, which will have a minimum investment of $500,000.
The BDT Invest Global Fund is the flagship sub-fund of a Dublin-domiciled Ucits compliant umbrella company. The Ucits restrictions mean the fund will have a maximum 10% cash holding and will not be geared.
Subject to regulatory approval, it will be launched later this month.
The three investment managers, Rob Brewis, Henry Thornton and Simon Dobson, founded BDT Invest early last year, having worked together on the emerging markets desk at Colonial First State.
Thornton said: "Our portfolio will be focused - we never run portfolios with more than 40 or 50 stocks. We are also geographically focused."
Previously, Dobson worked as an Asian and Japanese specialist for GT Management for 15 years, while Brewis and Thornton concentrated on Asia and other emerging markets at Thornton & Co (also founded by chairman Richard Thornton) and Credit Lyonnais before moving on to Colonial First State.
Because the managers' expertise is weighted towards the Asian region, the fund will probably tend to focus there, although the mandate is global.
BDT already runs three segregated accounts worth a total of $100m for three blue chips in the US, including Fremont Investment Advisors.
Thornton explained what drove him to launch an absolute return-style product for the retail market.
He said: "One thing that began to irritate us was that we'd sometimes be going to investors and saying 'We've only lost 10% of your money.' We'd get top quartile and were regarded as doing very well."
He felt he could and should be protecting his clients capital better.
In fact the three mandates they are currently running are based around emerging markets benchmarks but the retail fund will not be.
Thornton said: "We are going to measure stocks on the basis that we'll get absolute returns from them. If we see a deteriorating environment in the market were investing in then we'll withdraw from it.
"So when the emerging markets once again collapse, which will happen sometime in the next five years, we won't bear the brunt of it.
"In an ideal world our fundamental investment style would be bottom up, company selection, growth style. Last year was a value year and we don't want to be put into a style straitjacket. You shouldn't be too dogmatic."
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