Former-Fidelity and Merrill Lynch US large cap manager Gary Lowe is to return with a long-only fund ...
Former-Fidelity and Merrill Lynch US large cap manager Gary Lowe is to return with a long-only fund from his Isosceles Asset Management start-up boutique.
Lowe built up an enviable track record at Fidelity where he ran the American fund prior to John Muresianu, and then at Mercury, re-branded Merrill Lynch, where he managed the group's main retail US equity fund.
The track record of that fund, now managed by Richard Boon fell away during the end of his time at Merrills but Lowe said he had already passed it over to Peter Kaye in order to take on more of a management role. He ran the Fidelity American fund from 1984 to 1992 and the Merrills fund from 1993 to 1999, officially leaving the group in October 2002.
At Isosceles, Lowe has plans for a long-only portfolio targeting the discretionary fund management community, fund of funds providers and institutional marketplace.
An application to launch the fund as a Dublin-based Uscits vehicle has been placed with the Central Bank of Ireland.
The fund will have a high minimum charge, he said, precluding direct retail investment. Aiming at a tracking error of between 3% and 6% against the S&P 500, Lowe will charge a base annual charge of 1% with a performance fee of 15% of returns over the return on the S&P 500 plus 1%. The aim of the 50 to 60 stock portfolio is to beat the index by between 3% and 5%.
It will not be managed as a quasi index fund and Lowe retains the freedom to back his high conviction ideas and to completely avoid stocks he does not like, regardless of their size.
Following the launch of that fund, perhaps as early as February next year, Lowe plans to broaden Isosceles range of products with a hedge fund.
He said: 'We think there is room for a good quality long only US product. There are so few people with experience in London. It has become a marginal activity for UK houses.' Lowe describes his approach as a blend of sectoral and macro analysis with bottom-up research to identify stocks best placed to benefit from those themes. In stock selection he seeks to identify market consensus before testing it on a stock by stock and industry basis to see whether an investment opportunity exists.
An example of this, Lowe said, is the current bearishness on US telecommunications carriers. After getting carried away in the TMT bubble, investors are extremely bearish on the sector.
This offers opportunities as there are signs that spending in the sector is picking up. Such opportunities are always to be found, he said, regardless of whether a market as a whole appears to be going nowhere. Lowe is supported by ex-DLJ fund manager Dale Gibson.
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