Investment boutique Charlotte Square is launching a fund of funds that invests only in portfolios in which the manager has placed substantial amount of his or her own money.
The vested interest performance fund will invest in around 10 unit trusts, Oeics and hedge funds, including the Fidelity special values trust managed by Anthony Bolton, Artemis' UK smaller companies fund, run by John Dodd, Odey's top-performing European hedge fund, run by Crispin Odey, and the Personal Assets investment trust, managed by Ian Rushbrook.
Edinburgh-based Charlotte Square says the idea for the fund came after it conducted research which revealed a huge performance gap between funds in which managers had a stake and those in which they did not. VIP manager William Forsyth says the fund would have returned 118 per cent over the past five years against a FTSE All Share fall of 18 per cent.
The fund, which has a £50,000 minimum investment, will skew towards hedge funds if the markets become turbulent. Scottish Life International will be its exclusive distributor from launch at the end of the month.
Forsyth says: “We will try to hold the best managers we can find. The people with money in their own funds are the most consistent performers, they seem to become more focused.”
A&B director Tony Lanning says: “It sounds very interesting and I would not be put off by the £50,000 minimum. We like to see managers with money in their own funds.”