JOHCM launches two funds for Asian specialists
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J O Hambro Capital Management has created two Asia ex Japan funds for the managers it recruited in May, when it acquired Singapore-based Silver Metis Capital Management.
The JOHCM Asia ex Japan fund can invest in companies across the market cap spectrum but will have a bias towards bigger quality companies. It is managed by senior fund manager Samir Mehta, who founded Silver Metis in 2007. Mehta previously spent nine years with Asian specialist Lloyd George Management in Hong Kong, where he managed Asian equities for institutional investors. He spent his last four years there as chief investment officer.
As its name suggests, the JOHCM Asia ex Japan small and mid cap fund will focus on companies that are at the lower end of the market cap spectrum. This fund is managed by senior fund manager Cho-Yu Kooi, who worked with Mehta at Silver Metis. Prior to that, she worked at Lloyd George Management as a portfolio manager from 2001 to 2008.
JOHCM says both managers share a similar investment approach based on stockpicking with an awareness of benchmarks without the constraints. They work from the basis that there are pricing inefficiencies in Asian equities that make individual stock selection important in generating returns.
The managers will look for companies that are capable of producing long-term sustainable growth and will also make smaller tactical allocations in their portfolios to short-term cyclical stocks that are attractively valued. Both managers build concentrated portfolios of typically 35-60 stocks following detailed analysis of the companies and top-down macro-economic analysis. Regular interaction with company management is seen as important is giving the managers confidence over the long term, meaning that turnover in the portfolio will be low and trading costs that would eat into the returns are limited.
Some investors who are looking for Asian exposure to diversify their portfolio may see the specialist experience of the fund managers, who have worked together for a long time, as a good reason to invest. JOHCM’s policy of capping funds may also be attractive, but some investors may be wary of the potential high volatility that comes with investing in Asian equities.
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