The third of JO Hambro Capital Managements quartet of new retail products is the UK emerging companies fund.
Emerging companies is an open-ended investment company (Oeic) listed on the Dublin Stock Exchange. It is aimed at experienced investors who are looking for growth over the long term and medium risk.
To spread the risk, the Oeic will invest in at least 80 small UK companies that have the potential to evolve into much larger operations. These will include companies such as Axon, Monsoon and Systems Union Group, which makes accounting software for small companies.
The Oeic will benchmark the FTSE smaller companies index, which contains 989 companies. According to the London Stock Exchange from October 16, 2000 to October 16, 2001 the share price of Systems Union Group went from £0.53 to £0.75, Axon went from £8.25 to £1.60 and Monsoon went from £0.59 to £0.76.
UK emerging companies will be run by Max King, who is also running the UK recovery fund. King has been a director at JO Hambro Capital Management since 1997 and managed the Piccadilly growth and capital opportunities investment trusts. He also managed the Premier UK emerging companies fund from 1999 to 2001.
The fund will face a lot of competition in what is a crowded market. Standard & Poors lists 77 funds in the UK smaller companies market, all with similar structures and objectives. The JO Hambro Capital Management fund does not stand out as adding anything new to this market.
According to Standard & Poors the Piccadilly growth fund is ranked 12 out of 15 funds, based on £1,000 invested on a mid-to-mid basis with gross income reinvested over one year to October 15, 2001. The JO Hambro capital opportunities fund is ranked 20 out of 24 funds, based on £1,000 invested on a mid-to-mid basis with gross income reinvested over three years to October 15, 2001.