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JOHCM creates European fund for new recruits

Boutique manager JO Hambro Capital Management has created the JOHCM Europe dynamic growth fund for the managers it recently recruited from Thames River Capital.

Trygve Toraasen and Carlos Moreno will run the new fund in the same way as the Thames River European dynamic growth fund. Before joining Thames River in 2009, they spent 14 and 15 years respectively at Fidelity. Toraasen held various fund management roles at Fidelity, most recently as manager of the FMR Europe and Fildelity European dynamic growth fund. He also worked as a research analyst for the firm. Moreno ran institutional money at Fidelity and started at the firm as an analyst.

The fund will be capped at £2bn to prevent it becoming unwieldy. It will comprise 40 to 50 European stocks, including the UK, of all sizes that the managers see as undervalued. Toraasen and Moreno will combine this value approach with a growth style, selecting undervalued stocks that can grow and increase their profits.

The portfolio will be unconstrained by benchmark weightings, so that geographical and industrial sector exposure will be a reflection of bottom-up stockpicking. The fund can invest across Europe, including the emerging economies of Eastern Europe. The intention is for the portfolio to be robust, so that there is always something that is outperforming, whatever the market conditions.

Stocks will be selected in companies where changes in the company. its industry or in society will lead to growth that is not reflected in the share price.

Toraasen and Moreno thrive in a boutique environment that allows them to manage money without the constraints of some of the bigger fund management groups. Their management style is about understanding the individual characteristics of companies to determine what a company is really worth.

This fund could benefit from the low valuations on which many European companies are trading. Portugal has revived European sovereign debt concerns, which could have a negative impact on the region’s stockmarkets. However, JOHCM says many European firms are global businesses that will not necessarily be affected by these issues.

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