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F&C outsources US and Japan portfolios

Foreign & Colonial investment trust has outsourced management of its American and Japanese assets and introduced an overall performance fee.

The 450m US large-cap portfolio will be split between four managers while its 120m Japanese portfolio will be run by Goldman Sachs. Management of the US small-cap business will stay with F&C.

F&C says it expects the changes to provide better stock selection. The 2.3bn trust, run by Jeremy Tigue, has been criticised for the performance of its American and Japanese parts.

Of the US large-cap business, 157m will go to Barrow Hanley, 66m to Gartmore, 137m to Loomis Sayles and 90m to GMO. The managers will be co-ordinated to avoid investing in the same stocks.

Goldman Sachs will run the Japanese portfolio on a quantitative basis.

F&C head of communications Jason Hollands says: “We now have the ability to earn performance fees based on the overall performance of the trusts. Some analysts might have said we would avoid investing more in the US large- cap sector because it would mean losing money to exter- nal managers but the new fee structure means F&C still has a vested interest in generating overall performance, whether in-house or through outsourced management.”

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