The defection of three members of Fidelity’s multi-manager team to Resolution Asset Management brought the subject of boutiques back to the front pages last week. Chris Ralph, Jason Collins and Simon Mungall will set up a multi-manager joint-venture towards the end of this year. The boutique will follow RAM’s established model, with ownership split 50/50 with the three men.
RAM will provide distribution, sales and compliance support, leaving the boutique partners to focus on portfolio management. The firm has so far set up three joint-ventures. First to sign up were Barry Norris and Oliver Russ, who arrived from Neptune Investment Management. They founded Argonaut in May 2005, with the launch of a European alpha portfolio.
This was followed by European income, unveiled at the end of the same year. The concept proved popular and Argonaut recently revealed that it has passed the £1 billion mark in assets under management. The bulk of the money, more than £400m, is in European alpha, although the income fund is catching up, with £350m.
Following this initial success, RAM founded Cartesian in conjunction with Andrew Kelly and David Stevenson, former managers at SVM. The boutique, which focuses on British equities, launched its UK opportunities fund on December 29, 2005. The portfolio has since accrued about £130m in assets. Cartesian recently signalled its intention to launch a 130/30 product later this year.
At the end of 2006, RAM unveiled Hexam, an emerging markets boutique. The firm continued its pattern of recruiting established teams by poaching seven members of Barings’ emerging markets group. Hexam has unveiled long-only Dublin-domiciled global emerging markets and emerging Europe Oeics.
Investors have been quick to buy into RAM’s boutique concept, and the structure has also attracted the Adviser Fund Index panellists. Both Ben Willis, head of research at Whitechurch Securities, and Mick Gilligan, director of fund research at Killik, are positive on the model. Willis expects other large firms to follow RAM’s lead in future.
Whitechurch and Killik have also invested money with PSigma Asset Management, founded earlier this year by Bill Mott, Graham Fuller and Ian Chimes. The firm adopted RAM’s model, with ownership split 50/50 with Punter Southall. PSigma launched an income portfolio in April, and the concept once again brought in significant investment. The fund raised more than £100m in its three-week launch period and has since grown to £170m. Chimes says PSigma is likely to focus on more specialist products when it expands its range.
Despite its short-term track record, the income fund was added to all three AFIs in the May rebalancing.
Alongside PSigma, a number of other boutiques – Barmac Asset Management, Morant Wright Management and SVM – also joined the indices.