Fund Times: 19 - 23 January
Fidelity adds to income range; Alliance Trust Asset Management launch two equity funds and appoint Japanese equities head; Another wave of changes at New Star; J O Hambro Capital Management adds to European equity team; Norwich Union defers redemptions on property fund.
Fidelity adds to income range
Fidelity International will launch an Enhanced Income fund next month for Michael Clark. The fund aims to deliver a yield that is 1.5-2 times the FTSE All-Share index yield, but whether it can achieve it remains to be seen. To help drive up income, the manager will write covered call options on equities held by the fund. Clark will work with David Jehan –who is a derivatives director at the firm – on managing the call portion of the portfolio.
Clark also manages Fidelity Income Plus, which he took over from John Stavis in July last year after a few disappointing years. This marked Clark’s first stint in portfolio management as he had been an analyst with Fidelity since 2002. You can read our opinion of the fund here.
Alliance Trust Asset Management launch two equity funds and appoint Japanese equities head
Alliance Trust Asset Management has this week launched UK Equity Income and North American Equity funds. The funds are run by the teams managing the UK and US portions of the firm's closed-end offering, and will have compact portfolios of 30-45 holdings. The Alliance Trust UK Equity Income fund will be run by Neil Tong who is head of UK equities and had been at the company for 12 years. Tong will draw on the work of four UK equity analysts. Matthew Strachan will manage Alliance Trust North American Equity. Strachan has been at the trust for 24 years and heads a team of five specialists in North American equities, one of whom is based in the US. Both teams will leverage the company’s proprietary research centre and its specialist global analysts team.
Elsewhere in the company, Jonathan Bolton was appointed to head the Japanese equities desk. Bolton joins with a wealth of experience acquired through 14 years at Schroders, where he managed a number of portfolios before becoming Director of the group’s Japanese registered company. Bolton was also a partner at TT International Asia for three years, managing EAFE portfolios and a director at Dresdner RCM.
We note that investors in Alliance Trust PLC, a closed-end fund, are having their assets used to fund Alliance Asset Management and Alliance Savings, and to seed these new funds with assets at launch.
Another wave of changes at New Star
Further re-shuffles have taken place at New Star following the departure of Hitesh Thakrar who previously managed New Star Global Equity and New Star Technology Unit Trust. Nick Sheridan, manager of New Star European Value was appointed on board the Global Equity fund and Lucy Bernays, current co-manager of New Star Pacific Growth will take over the Technology Unit Trust.
New Star also announced it will merge the Monthly Income unit trust into New Star Managed Distribution, run by the firm’s CIO Gregor Logan. As the fund invests some 70% of its assets in bonds and 30% in equities, the bond sleeve is managed by James Gledhill (New Star’s head of fixed income) and the equity portion by Trevor Green. Green joined the firm from RCM in mid-2008 and recently took the helm on Whittaker’s New Star UK Growth.
The changes come at a time of crisis for the firm, which gathered assets in the bull market with a suite of high-risk funds, only to see them crash badly in the severe downturn that started in mid-2007. The firm has had to cede control to its former lenders, who are currently shopping what remains of it to various asset management groups. If that wasn't bad enough, it was widely reported this week that former manager Patrick Evershed is taking the firm to an employment tribunal, claiming constructive dismissal. His New Star Select Opportunities Fund landed in the bottom quartile of its Morningstar UK Small Cap Equity category in every calendar year from 2004 through 2008.
J O Hambro Capital Management adds to European equity team
JOHCM has appointed Mark Leach as an analyst on the European equity team, supporting managers Rod Marsden and Paul Wild. Leach was a European equity analyst at hedge fund manager Powe Capital Management, founded by manager Rory Powe. Prior to that Leach was at Ruffer Investment Management working on private client portfolios. You can read our opinion on JOHCM’s European equity funds here and here.
Norwich Unions defers redemptions on property fund
Norwich Union has this week announced it will temporarily defer settlements on the Norwich Union Unit-Linked Property fund (life and pensions). The fund, which invests in UK commercial property, has been affected by dire trading conditions as buyers struggle to access credit. This implies redemptions can take up to 6 months to be executed, although with some exceptions. For example, policies with a contractual maturity or a retirement date or withdrawals already set-up, are exempt. This follows a number of deferrals introduced across other UK property funds. Other UK property funds on the Norwich platform such as Aviva Investors Property Trust continue to trade normally.
