Each month RealAdviser asks a panel of fund selectors to give their verdict on a company's fund range. This month Cazenove gets the once-over
Lee Gardhouse, head of fund of funds at Hargreaves Lansdown
Gardhouse holds two Cazenove funds within his portfolios - Tim Russell's Cazenove UK Growth and Income fund and Chris Rice's Cazenove European fund. Gardhouse says he uses both funds as core holdings.
"They are not shoot-the-lights-out funds even if Cazenove European is less core than Cazenove UK Growth and Income. Tim Russell had a tough time in 2004 but he outperformed in the previous five years. Tim attributes last year's performance to a few stock calls not coming off. He held some retailers because he thought they would be subject to bid speculation like Marks & Spencer but this did not happen.
"But we are keeping faith. In the first three months of this year, Tim has done well and has a very good long-term track record. With a track record like Tim's, we are happy to sit on our hands during a period of less strong performance.
"Cazenove European has performed slightly better over the past year. We like the fact that both managers tend to outperform the market without taking too much risk."
Sam Liddle, fund of funds manager at Miton Investments
Liddle says that the Cazenove UK Growth & Income does not fit Miton's approach. "We take macro asset allocation decisions for our portfolios. When we like a market, we want to be able get as much out of the rally as possible. Therefore, we invest in funds that perform best in these conditions.
"We have invested in Neil Pegrum before, when he was at M&G. The problem is that we now have the Walker Cripps UK Growth, Rensburg UK Select Growth and the UBS UK Smaller Companies funds. These funds are all doing well and there is no reason to change for change's sake."
Gary Potter, co-head of the Credit Suisse Asset Management portfolio service
Potter says he likes both Russell's and Pegrum's approaches to managing money. "Neil's funds can appear to be volatile from time to time but that is his style of management. He can be relatively aggressive in managing his funds."
He adds that Cazenove appears to be a positive working environment for Russell and Pegrum as it provides them with the "freedom to manage mandates as they want to. The managers have their own investment styles and are not constrained in their approaches. We do not hold the UK Dynamic fund. That is nothing against Neil as we think he is a very good manager but we already have good funds in the alpha and special situations area.
"We would happily hold Cazenove UK Dynamic and interestingly the Artemis funds of funds that we have acquired do have stakes in Neil's fund."
Bambos Hambi, head of multi-manager at Gartmore
Hambi says he holds both the Cazenove European and UK Dynamic funds. "We got to know Neil well while we were all working at Insight. He is very good at spotting undervalued companies and adds value sensibly. Neil has a multi-cap approach to investing even though he is thought of by many as a small cap manager. We like managers who are more flexible, particularly in the current market environment. "Chris Rice gives us large cap exposure in continental Europe. Large caps do not dominate indices in continental Europe in the way they do in the UK. Therefore, large cap exposure is not as constraining."
Mark Harris, head of the New Star Asset Management fund of funds team
Harris worked with Russell at HSBC and invested with the Cazeonove UK Growth and Income fund at launch. "We think Tim is a very skilled fund manager, a good stock picker and one of the few who can rotate a value and growth approach to investing. But we sold our stake in the fund as it grew to a relatively large size very quickly. If the fund had been capped at £500 million, we would still be invested.
"We hold Chris Rice's European fund and are very happy with the performance. We like the fact he delivers good risk adjusted returns. I have met Neil Pegrum once but have never been invested in his funds."
John Chatfeild-Roberts, head of multi-manager at Jupiter
Chatfeild-Roberts owns Russell's hedge fund within his fund of hedge funds. "Tim is a good manager and his hedge fund has done very well. He has consistently been adding 1% a month since launch a couple of years ago with low volatility. That is an impressive record and all you can ask for from a manager.
"We invested with Neil Pegrum at Insight and even though he has had a good start at Cazenove, we do not own him now. He is in a very competitive sector and we already invest in the Artemis UK Special Situations, Fidelity Special Situations, Framlington UK Smaller Companies, Merrill Lynch UK Dynamic and Framlington UK Select Opportunities funds."
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