Pending FSA approval, Hiscox Investment Management (HIM), the asset management arm of insurer Hiscox...
Pending FSA approval, Hiscox Investment Management (HIM), the asset management arm of insurer Hiscox, has agreed to acquire Fox-Pitt Kelton's funds.
FPK, an investment bank specialised in the financial sector, decided to sell the funds because it is a very small part of the bank's buisness.
"The deal is not completed yet," says Alec Foster, managing director of HIM, who adds that once the FSA approves the deal, HIM will take on board FPK's four offshore financial funds, which will fit with HIM's £46 million Insurance Portfolio Fund.
The timing co-incides with HIM's strategy to target the retail market with its insurance fund. So far, the product has been available only to private client stockbrokers and institutions. The firm will target IFAs and the minimum investment to enter the fund will be £1,000.
"We find specialization appeals to investors," says Foster. HIM's insurance product is the only fund which invests solely in international property and casualty insurance stocks.
"We don't like life insurance stocks," says Foster, referring mainly to the UK and German life sector. "We don't understand them. We don't know what their products are or what they're marketing. We don't know what promises they're making to their customers and if they're delivering".
However, through the FPK funds, there will be some exposure to life insurance stocks, although the majority of the holdings in the funds are banks.
David Astor, sole fund manager of the FPK US Financial Fund, and joint manager of the FPK European Financial Fund and the FPK Far Eastern Financial Fund, will continue to manage these funds with HIM. Robin Evans, the other FPK joint manager, will provide strategic and investment advice from FPK. Under the purchase agreement, he has been retained for three years initially.
Assets of the fourth FPK Fund, the Dublin-domiciled Financial Special Situations Fund, will now mirror the insurance portfolio fund, offering clients an offshore version of the OEIC.
According to Foster, HIM and FPK have a similar style of managing assets, taking a bottom up stock picking approach as well as complementary specialist knowledge of financial stocks. For the Far East fund, for instance, Astor avoids huge stocks like HSBC, and would rather concentrate on smaller and more focused banking stocks.
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