By Leo Bland James Abate, former manager of Credit Suisse TransAtlantic, is returning to fund manag...
By Leo Bland
James Abate, former manager of Credit Suisse TransAtlantic, is returning to fund management with GAM, which will launch a retail US fund later this quarter.
Abate left Credit Suisse Asset Management at the end of April last year but his contract did not allow him to work in fund management for 270 days after leaving the group.
The restricted period expired at the end of January and in the interim Abate worked as head of corporate development and chief financial officer at technology firm Metastream.
Abate will continue to be based in New York with GAM and will manage large-cap US equity portfolios including a new US fund as part of the GAM Star Fund range.
The fund will be a Dublin-domiciled vehicle set up under the Ucits rules.
It will be FSA recognised and available to UK investors. The annual management fee is likely to be 1.5% with a 5% initial charge, but the name of the Ucits fund has yet to be finalised.
The portfolio will be managed in a similar fashion to Credit Suisse TransAtlantic, with between 35 and 55 stocks.
Abate said: "I will be looking to deliver the best risk-adjusted rates of return. My style is valuation-oriented but I will buy good growth stocks when opportunities present themselves. The best way to look at the market this year is that it is going to be much less thematically based than 2000.
"We have a change this year because the Federal Reserve has cut rates and I believe we have seen the bottom of the equity market. People are talking about the Federal Reserve being the provider of liquidity, although people were also saying this about the 199091 slowdown.
"I do not think the current US slowdown is going to be as severe as that and I do not believe that the Federal Reserve is going to be as aggressive going forward as it was in 199091 to reflate the economy."
Abate said he will be looking for stocks such as telecoms business Global Crossing, which have dominant franchises in their marketplace. He believes the boost to financials stocks, which many have anticipated from falling interest rates, is already largely in the price.
He said: "On balance, the structural foundation for US equities is positive, particularly due to global political stability, steady interest rates and low inflation. The stock market is likely to remain volatile, trading oriented and suited towards stock selection rather than systematic factors.
"I believe there will be good returns available in the US market this year but it will not be an explosive rally.
"It will be about focusing on individual companies and I will look to concentrate on companies that follow a prudent strategy for reinvesting capital and aim to identify companies that are unique in terms of competitive position and company-specific opportunities for improvement."
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