The growing popularity of absolute return funds has seen Goldman Sachs Asset Management launch a new product in the space, while the surge in assets within the Invesco Perpetual Global Targeted Returns has led to a change in how the portfolio can be built.
But there’s been more than just absolute return news in the asset management industry over recent days. In the following article we round up the most important industry headlines of the week.
Invesco Perpetual tweaks Global Targeted Returns mandate
The mandate of the Invesco Perpetual Global Targeted Returns fund has been changed following its rapid growth in assets under management, to restrict the amount it can invest in other funds run by the group.
The absolute return vehicle is currently able to invest 100 per cent of assets in other funds managed by Invesco but its new mandate limits this to 10 per cent. The move comes after the fund’s size reached £2.9bn.
Jonathan Lowe, head of client services at the asset management house, said in a letter to unitholders: “Now that the fund is of a sufficient size, exposure to [other] strategies is now primarily achieved by investing directly in the underlying assets rather than directly into other Invesco and Invesco Perpetual funds.”
“From 19 October 2015 we are amending the prospectus so that the Invesco Perpetual Global Targeted Returns fund can invest no more than 10 per cent in other funds, in line with how it is currently being managed.”
No changes will be made to the fund’s process, strategy and risk profile.
Since launch by former Standard Life Investments GARS managers David Millar, Richard Batty and Dave Jubb in September 2013 the fund has made a 12.34 per cent total return and outperformed the average fund in the IA Targeted Absolute Return sector.
Performance of fund vs sector since launch
Source: FE Analytics
Goldman Sachs unveils absolute return fund
Goldman Sachs Asset Management plans to launch a global absolute return fund, following an increase in investor demand for products offering returns uncorrelated to the market.
The Luxembourg-domiciled Goldman Sachs Global Absolute Return Portfolio will be managed by the firm’s dedicated multi-asset investing team, which is known as the global portfolio solutions groups and comprises more than 95 investment professionals.
Nick Phillips, head of international third party distribution for Goldman Sachs Asset Management, said: “Investors are becoming more focused on funds that seek to deliver specific investment outcomes. Following a period of strong returns across equity and bonds, investors are increasingly looking toward absolute return strategies as a way to generate returns whilst limiting potential losses.”
“We believe the multi-asset absolute return approach employed by the fund, which harnesses the full breadth of the GSAM platform, is well positioned to target this market.”
It will aim for “consistent, attractive returns that are less dependent on the direction of traditional markets” and will invest across multiple asset classes.
Neill Nuttall, the fund’s co-portfolio manager, added: “We expect significantly lower returns on traditional investments going forward and are focused on offering investors the opportunity to diversify into alternative sources of return while remaining nimble to capture investment opportunities.”
EdenTree hires RWC manager for UK fund
EdenTree Investment Management has poached Philip Harris from RWC Partners to run the EdenTree UK Equity Growth fund, following the departure of Andrew Jackson earlier in the year.
Harris has more than 23 years’ experience as a UK small and mid-cap fund manager, and was most recently at RWC where he was part of the RWC Focus fund range management team. He has also worked at Hermes and Credit Suisse Asset Management during his career.
Sue Round, director of group investments at EdenTree, said: “Philip’s work over the years will bring fresh insight and experience to the strong team we already have at EdenTree.”
“The UK Equity Growth fund has consistently delivered for more than a decade, and it’s exciting for us to welcome Philip’s invaluable expertise in continuing to drive this forward. Building on our existing team is essential to our growth, and 2015 now looks set to be a standout year.”
FE Analytics shows EdenTree UK Equity Growth is currently top quartile in the IA UK All Companies sector over one, three and five years. It is also first quartile over three and six months, a period that has been marked by significantly volatility for risk assets.
Performance of fund vs sector and index over 5yrs
Source: FE Analytics
F&C UK Property switches to PAIF structure
The F&C UK Property fund has converted to a Property Authorised Investment Fund (PAIF) structure following the approval of the move at a unitholder meeting on 11 August.
The structure means that tax-exempt investors, such as those invested through an ISA, pension fund or SIPP as well as charities, are exempt from paying UK tax on distributions from property related income and interest payments.
This effectively means a 20 per cent uplift of the fund’s current yield for eligible investors. Investors who do not qualify to invest directly in the PAIF will be able to invest via a feeder fund, which is structured as a unit trust and will have the same underlying exposure to the properties held by the PAIF.
Guy Glover, co-manager of the F&C UK Property fund, said: “We are committed to maximising total return and value for our investors. We believe the fund’s conversion to a PAIF is in the long-term best interests of shareholders, many of whom will now be able to benefit from investing in a more tax-efficient way.”
Neptune puts Dowey and Parker on board
Neptune Investment Management announced last week that James Dowey, chief economist and chief investment officer, and head of distribution Charlie Parker are to join its board of directors.
Dowey, who joined the firm in May 2007 as economist, became chief economist in September 2009 and was assumed his current role in May 2015, is “at the heart” of Neptune’s team-based research investment process and plays “a vital role” in shaping its view of the global economy.
Parker, meanwhile, joined the company in August 2014 as head of strategy before being promoted to head of distribution in July this year. He has been working on changes to the firm’s distribution team setup, its fund range and the way it communicates with clients.
Robin Geffen, Neptune founder and chief executive, said: “Both James and Charlie’s contributions to the success of Neptune have been vital. One of the most rewarding aspects of building Neptune has been seeing our own talent grow into roles such as these. The appointments are a key move for the company, augmenting the existing team as we ensure our business is resourced and positioned for the future.”
“Over the past year we have made a number of moves to enhance our longstanding investment process, whilst staying true to our underlying philosophy. James’s contribution to that process and Charlie’s contribution to its communication have been pivotal.”