New fund management groups on the investment radar

New names on the investment radar

Investing your savings in a trusted and safe pair of hands is paramount to growing your wealth - and for peace of mind for some.

Funds run by star managers with successful careers that span decades at well-established firms are naturally an appealing home for your cash.

Many of the most successful managers are, of course, the most experienced ones. Nigel Thomas of Axa Framlington is one big name known for his consistently good performance. But what about the lesser-known and/or newer investment companies and their managers?

Our experts say there are many lesser-known fund management groups that are worthy of our money. So sticking with well-known names and brands could mean missing out on some bumper returns. We discover some of the names that should be on your radar.

Miton

UK fund boutique Miton was put firmly on the map when respected fund manager Gervais Williams joined as managing director in 2011, having previously managed money at Gartmore.

Gervais Williams spoke to Michelle McGagh to explain which companies the Miton UK Multi Cap fund is currently buying, holding and selling.

The company was boosted further with the acquisition of Psigma last year, which included veteran UK equity income fund manager Bill Mott and industry stalwart Ian Chimes.

Patrick Connolly at Chase de Vere says: 'The growing reputation of the firm has enabled them to recruit more good-calibre people including David Barron at the end of last year, who previously headed up the investment trust business at JPMorgan. It is likely there will be more investment trust launches to come.'

Mark Dampier at adviser firm Hargreaves Lansdown says: 'This is a nice fund management group and manager George Godber, who manages the UK Value Opportunities fund is most definitely on my list of up-and-coming managers.'

The fund was launched in March 2013 and has since returned 28 per cent compared to a benchmark average of 14 per cent.

Hannah Edwards at BRI Wealth Management says she likes the Miton Smaller Companies fund, launched in December 2012. It has returned 68 per cent compared to a 30 per cent benchmark average.

She explains: 'The fund, run by Gervais Williams, has had a fantastic run. The small size of the fund and the manager's focus on truly smaller companies has enabled it to invest in some fantastic companies that other funds couldn't or wouldn't want to invest in.'

Majedie Asset Management

Majedie Asset Management, established in 2002, is an investment boutique that specialises in equities, primarily for institutional investors. Majedie currently has four funds accessible to private investors: the UK Equity fund, the UK Focus fund, the UK Income fund and the Tortoise fund.

Gary Potter, co-head of F&C's multi-manager team, likes the UK Income fund run by Chris Reid which is a newcomer to the sector, having only launched in December 2011. It has returned 26 per cent over one year, compared with a sector average of 14 per cent.

He says: 'It's an outstanding fund and definitely one to consider for those who like equity income funds.'

Darius McDermott at Chelsea Financial Services highlights the Tortoise fund, which is run by Matthew Smith and Tom Morris. It has returned 22 per cent over one year and 45 per cent over three years but currently it is closed to new investors to ensure it doesn't get too large. It is already at around £900 million.

McDermott says: 'It's a good-performing long/short equity fund, which is popular among multi-manager funds. It is soft-closed at the moment - although the fund has been soft-closed and reopened in the past to control flows better.

'Private investors should be wary of going in blindly simply on the back of past performance and make sure they understand this fund, which uses complex techniques to make gains.'

Hermes Fund Managers

Hermes has not marketed funds to individual investors - only to large companies. It has, however, launched some funds for private investors, which have been noted for their good performance by experts who are interested in emerging markets.

Potter says: 'Aberdeen and First State have been household favourites for those who want to invest in emerging markets. But these are no longer accessible because the funds got too big and they decided to close to new investors. Hermes has a very appealing offering here.'

According to data analyst FE Analytics, in 2013 the Hermes Asia ex Japan fund was the top-performing vehicle in the IMA Asia Pacific ex Japan sector, while the Hermes Global Emerging Markets fund was the second-best performer in the IMA Global Emerging Markets sector.

Over one year, the Asia fund has returned 25 per cent compared to a sector average of 3 per cent. Potter adds: 'The numbers are cracking. Jonathan Pines has a unique style that is completely flexible and adaptable to any market conditions. He is not high yield or mid cap - he can invest in what he deems is attractive across the market.'

Somerset Capital

Somerset Capital, a boutique manager, was formed only seven years ago and its focus is also on emerging market equities. Rob Gleeson at FE Research says the investment house is 'making a real name for itself'.

He likes a member of Money Observer's Premier League of fund managers, Somerset Emerging Markets Dividend Growth, managed by Ed Lam, which has lost 7 per cent over a year compared with a sector average of a 10 per cent loss; but over three years returned 10 per cent.

Gleeson says: 'The fund is one of a small number in its sector to play the dividend card. This is a process we like and it has proved its value in several different strategies.

'The fund was launched in March 2010, just before a steep decline in the stock market. It has coped very well though, delivering more than 18 per cent compared to a slight loss from the IMA Global Emerging Markets sector average. It is well ahead of the better-known Aberdeen Emerging Markets Equity fund over the period, which has returned only 12.2 per cent.

'We like the fact that it protects well against the downside and see it as a good option for a long-term investor with a cautious eye on the short term. A yield of 3 per cent is also very attractive.'

Connolly adds: 'The geographical breakdown of Somerset Capital's funds is usually different to competitor funds, without a huge weighting in the Bric (Brazil, Russia, India and China) countries, meaning they can provide good diversification alongside other emerging markets funds.

'Currently, the emerging markets have gone sour and while this can create investment opportunities for Somerset to exploit, it also means that investors are less likely to invest. However, when emerging markets do bounce back they should be well positioned to make further strides forwards.'

Connolly also likes Somerset Emerging Markets Dividend Growth.

Woodford Investment Management

Neil Woodford, the country's best-known fund manager who looked after more than £20 billion of savers' money at Invesco Perpetual, is to launch a new investment management company in May. Woodford Investment Management is being created on the back of an existing business - Oakley Capital.

Woodford's departure from Invesco Perpetual, where he worked for 25 years across numerous portfolios, was announced in October. Analysts expect billions of pounds to follow him from private and professional investors who will be keen to follow Woodford's new ventures given his sterling track record and stellar returns. Oakley does not currently run a division through which private investors can access mainstream equity funds.

Under his own brand, Woodford has announced he will launch an equity income fund, that will open to investment on 2 June, and run it in the same style as his old ones - the Invesco Perpetual Income and High Income funds.

Dampier says: 'I expect this to be a very popular choice for loyal investors to Neil and imagine he will start off with upwards of £1 billion - unheard of for any typical new firm - and raise more than £5 billion very quickly. I expect it will also attract new money as well as that from those that have invested with him before. More funds will follow the initial income fund when it has bedded in.'

This article was written by our sister publication Moneywise.


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