Liontrust plans fund merger and rebranding across range
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Liontrust is planning to merge its First large-cap fund into its First growth fund as part of a range of changes.
The company has asked for investors to support the merger of the £22m First large-cap fund, managed by Gary West and James Inglis-Jones, into the £116m First growth fund, which is run by Anthony Cross and Julian Fosh.
Liontrust says both funds have a similar mandate but First large cap has a restricted remit to invest in companies within the FTSE 350.
It also raises concerns about the efficiency of the First large-cap fund and says that a merger is likely to see the total expense ratio fall.
The firm plans to rename a number of funds across its range. First growth will be renamed UK growth, Liontrust intellectual capital trust will be rebranded as UK smaller companies, First opportunities will become special situations, continental Europe will become European growth and the First income fund will be rebranded as income fund.
The funds will also be seeking the wider investment powers of Ucits III. Liontrust says the introduction of these powers will see a rise in the total expense ratios across the range.
It estimates the biggest increase in total expense ratios will be on the First opps fund, from 1.93 to 2.12 per cent, and the continental Europe fund, from 1.66 to 1.76 per cent.
The proposals for renaming the funds and introducing wider powers will be made at an extraordinary general meeting on September 28 while the merger of First large cap into first growth, if approved, will take place on September 30.
At the start of 2009, the First growth fund and First income funds were managed by investment director Jeremy Lang. William Pattisson, another star manager at the company, was running the First large cap and focus 350 funds.
On January 13, the duo resigned, triggering a 33 per cent fall in Liontrust’s share price in a day and contributing to group-wide fund outflows that took its assets from about £3bn at the time to around £1bn today.
Chelsea Financial Services managing director Darius McDermott says: “The changes make sense, particularly as some funds were named ambiguously. They have merged funds with similar mandates and the wider powers are also sensible if used in the right way.”
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