IFAs are awaiting the outcome of a multi-million-pound strategic review by £10.5bn Edinburgh fund manager Martin Currie to address fund performance issues and position itself as a global investment company.
The self-styled “big boutique” is scrapping its two UK equity Oeics, turning one into a global equity income product. It is launching three absolute return Ucits III funds – Japan absolute alpha, European absolute alpha and global resources absolute alpha as well as a Latin America fund.
The firm has been on a hiring spree, recruiting seven people from Edinburgh rival Swip for the emerging markets team, led by Kim Catechis, and adding to its Asia and global equity teams. It has also bought hedge fund mandates from London-based Sofaer Capital along with the management team, who will run the Ucits III funds.
This all comes after the staff-owned firm’s £654m North America fund was cut from Hargreaves Lansdown’s Wealth 150 list in July. The fund fell by 15.5 per cent in the year to the end of July 2009, ranking it bottom-quartile, and the following year is third-quartile.
In March, Hargreaves also cut the £26m global alpha fund from its Wealth 150. The fund lost 20 per cent in the year to end July 2009 and added just 10.6 per cent over the next year – both bottomquartile results.
Other funds ranking bottom-quartile in the year to end July 2010 include Asia Pacific, emerging markets, global, North American alpha and UK growth.
Managing director of sales, marketing and client service Andy Sowerby says the review, carried out over the second half of last year, should be complete by October.
He says: “You are seeing the culmination of 12 months’ work. The difference between a private and public company is we are not interested in quarter-by-quarter profits. We have to invest the right amount of money and resources into all things we do.”
He says the decision to scrap the UK Oeics reflects the industry’s shift towards emerging markets. But he admits: “They were underperforming and there is no getting away from that. UK equities have been in net outflows pretty much on a consistent basis for the last five years.”
He dismisses comparisons between Currie and Artemis in 2002, when it was bought by Dutch investment bank ABN Amro, causing some IFAs to complain it lost its edge as an independent boutique.
He says Martin Currie has two external investors holding a total of 25 per cent but they will never become majority owners. “It is completely different to the Artemis situation. We own the company and we are clear this company will remain independent. It is the major strength of the firm.”
Hargreaves Lansdown senior analyst Meera Patel says: “They have done the right things. It is great they have hired these guys from Swip, they have a good reputation. I just hope it translates into good performance.”
Chelsea Financial Services managing director Darius McDermott says he is keeping the North American and Asia Pacific funds on his buy list.
He says: “Having a strategic review of a business is an eminently sensible thing to do every few years.”