Frostrow Capital, a company set up by four former members of the investment trust team at Close Investments, has already taken over three mandates from Close within a day of being launched.
Headed up by Alastair Smith, the former managing director of Close Finsbury Asset Management, Frostrow Capital is majority owned by its executive team which includes Grant Challis, Mark Pope and Tracy Arthur, all former employees of Close Investments, a subsidiary of Close Brothers Group.
The company, as an independent boutique provider of management services to investment companies, claims it is unique in being “exclusively dedicated to performing the entire executive function for investment companies”, with the exception of portfolio management.
As a result, it aims to win mandates from investment companies where the boards prefer to separate the company management and investment management functions, although it points out as it has “access to the investment industry’s leading advisers and investors”, it will also be actively seeking to launch new investment companies.
However, it has confirmed it has already been appointed as manager of three listed investment trusts, previously managed by former employer Close Investments, with immediate effect.
The mandates - Finsbury Growth & Income Trust, Finsbury Emerging Biotechnology Trust, and Finsbury Worldwide Pharmaceutical Trust - are worth approximately £494m in total, on a market capitalisation basis, although all three investment trusts will retain their existing investment managers.
This means Lindsell Train Investment Management will continue for Finsbury Growth & Income Trust, while OrbiMed Advisers will stay in place for Finsbury Emerging Biotechnology Trust and Finsbury Worldwide Pharmaceutical Trust.
In addition, the company says it is “actively working” with Close Investments to achieve an efficient and successful handover of responsibilities.
Challis, partner for business development at Frostrow Capital, says the firm believes there is a real need for a boutique approach to managing investment companies.
He says: “Currently, for virtually all investment companies, this function is either performed by specialist fund managers who would rather be spending their time picking stocks or it is a non-core activity within large investment houses.
“In neither case are shareholder interests likely to be as well served as they could be by an independent specialist such as Frostrow Capital.”
And Smith, managing partner at the firm, says: “We have assembled an excellent team of proven investment company specialists and are all very excited to be launching our new enterprise.”
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Nyree Stewart on 020 7034 2681 or email [email protected]IFAonline
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