Gartmore is preparing to launch a long/short pan-European fund for John Bennett and his team, its newest recruits.
The planned new product will be an all-cap strategy focusing on areas of change within companies and industries as a driver of investment opportunities. It will launch in May.
Bennett, along with Asim Rahman, Christian Billinger, both analysts, and Eleanor Cameron, a dealing manager, joined the firm from Gam earlier this month. The ex-Gam team has already assumed the management of the pan-European Sicav.
They will take on the management of the £1.9 bn European selected opportunities fund and continental European sicav on February 1. These two funds were formerly run by Roger Guy, Gartmore’s European hedge fund specialist. Bennett and his team will share resources with Roger Guy and Guillaume Rambourg, using similar investment styles.
Bennett says he will not make more than “single-digit changes” to these portfolios in the early weeks following the takeover, unless market conditions change, as he says they are already well positioned.
However, he may reduce the underweight to technology and healthcare, and move more underweight utilities.
“My biggest short on Gam European hedge was a utilities ETF at 6 per cent of net asset value. Come May, this may change, but I would look to reflect this view in the new fund if it was alive today,” Bennett says.
His asset allocation view at the moment would see him move short utilities and cyclicals, and perhaps mining, and go long pharmaceuticals and technology.
Bennett predicts a mini boom in the technology sector, especially in software, as this is a trend that has begun in America and is likely to spill over into Europe, he says.
In terms of his investment strategy, Bennett describes himself as contrarian. He dislikes the dichotomy between growth and value investing, describing it as “sterile”, although he says he is “value conscious”.
“This means you have a tendency to be a bit early, although it is better than being too late. If you deploy too much capital, you are then under pressure. You need to start small,” Bennett says. “We are looking for share price and newsflow confirmation of an investment story.”