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Quantum leap

I have been dismayed to witness the implosion of Credit Suisse Asset Management over the last few months, especially since I am old enough to remember the hard work that people such as Ian Chimes put into the venture when it started.

It was a particular shame when Bill Mott announced his retirement. This man is not only a gifted fund manager but is also able brilliantly to articulate his views without jargon to anyone.

I was therefore overjoyed to hear that he is teaming up with Ian Chimes and Graham Fuller, formerly of Newton, in a joint venture with the Punter Southall Group.

From this, the new PSigma income fund will be born, bringing with it the return of an equity income grandmaster.

It strikes me that Adrian Frost, who also ran a highly successful equity income fund for a big organisation, did something similar by joining Artemis. He was undoubtedly rejuvenated by working for a company where investment came first and politics came nowhere.

My belief is that Mott will be similarly refreshed. He is highly incentivised, not only because he is a part-owner of the business but also because he is investing his entire self-invested personal pension in the fund. I cannot think of much better alignment to investors’ interests than that.

Mott will be running the fund in a traditional equity income style and his record in this area is outstanding. His success has historically been built on his ability to understand the outlook for the UK market and then buy the stocks that will prosper.

Like one of his great contemporaries, Neil Woodford, he stuck to his guns during the technology boom. Indeed, I met both of them within a month of each other in February and March 2000, when both were banging their hands on the desk warning of blood on the streets and the fantastic valuations that were available in traditional UK stocks. How right they were.

So the new fund should be a continuation of what Mott has always done. When he has high conviction in his stocks and the market outlook, he will run a concentrated portfolio of around 30 to 40 stocks. When his conviction is less strong, he will be looking to run a more diversified portfolio with perhaps 40 to 50 stocks.

He must have welcomed the recent stockmarket falls and be hoping that it does not suddenly pick up before he gets the money to invest.

He has already identified a number of companies that excite him so he has not been idle over the last few months.

Mott brings some fresh competition to the equity income sector and with recharged batteries I expect him to be there for some time. I am sure he expects to take plenty of money when the fund launches.

One does not need a PhD in quantum physics (although Mott has one, as it happens) to know that investors will follow him from Credit Suisse. I wish him every success in his new venture and we at Hargreaves Lansdown will be supporting him.

Mark Dampier is head of research at Hargreaves Lansdown.


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