GAM is launching a technology fund to take advantage of new trends and “deep distrust” of the sector.
The long-only GAM star technology fund will invest in technology stocks worldwide, but particularly in America, where it will hold more than 70 per cent of its portfolio.
Mark Hawtin, the manager, ran a technology hedge fund at Marshall Wace before joining GAM in 2008.
According to Hawtin the amount of specialist investment research on technology has declined considerably since the technology bubble burst in 2000. As a result, he says, the sector is misunderstood and inefficiently priced.
Investors’ distrust of technology has helped to cheapen stock prices, the manager says. Valuations in select areas such as cloud computing look full but there remain pockets of fast-growing opportunities on higher but acceptable multiples, alongside cheaper plays.
The GAM star technology fund is one of the few new launches in the sector, alongside the Cavendish technology fund last year. Hawtin says technologies that seemed a commercial possibility 10 years ago, such as smart-phones and the iPad, are mass-market successes.
Hawtin says Apple remains relatively cheap, priced in the teens as a multiple of its earnings. He is uncomfortable with valuations in social networking but says the trends towards web-based advertising and marketing can be played more cheaply.