Keystone Investment Trust, Lowland and Jupiter Emerging & Frontier Income Trust are all run by up and coming managers for investors to keep an eye on, according to investment trust analysts. 
The Association of Investment Companies (AIC) spoke with investment company analysts to find out which new managers they believe could carve out a successful career in their respective funds.
The investment company sector has a number of well-respected, long-tenured managers for investors to analyse, from Nick Train to Neil Woodford, but identifying the next rising stars can be more difficult without a long-term track record.
Below, FE Trustnet looks at the prospective ‘rising star’ managers highlighted by Numis Securities and Peel Hunt.
In an upcoming article we will look at the recommended managers of Winterflood Investment Trusts and Cantor Fitzgerald.
The first ‘rising star’ manager highlighted by analysts is James Goldstone, who took over the £237m Keystone Investment Trust from FE Alpha Manager Mark Barnett in April 2017.
Ewan Lovett-Turner, investment companies research director at Numis Securities said: “James Goldstone has big shoes to fill after taking over the management of Keystone Investment Trust from Mark Barnett.
“He has already put his stamp on the portfolio, continuing to utilise a bottom-up approach with a focus on quality companies with visible cash flow growth, but placing a greater emphasis on valuation, and less on the top-down macro framework.
“It remains early days, but he had made a good start with Keystone’s net asset value [NAV] total return up 4.4 per cent versus 2.6 per cent for the FTSE All Share since taking over.”
Performance of trust vs benchmark since manager start
Source: FE Analytics
Goldstone favours companies with strong balance sheets, high barriers to entry and those with the ability to expand market share, believing these traits help underpin long-term capital and income growth.
The manager uses an investment approach anchored around valuation, aiming to achieve total returns via both capital and sustainable dividend growth.
His largest weighting in the trust is to financials (39 per cent) with Barclays its top holding (4.1 per cent). Lloyds Bank, Provident Financial and Legal & General are also in its top 10.
The trust is trading at a discount to NAV of 10.3 per cent, is 6 per cent geared, offers a 3 per cent yield and has clean ongoing charges figure (OCF) including performance fees of 0.72 per cent, according to the latest figures from the AIC.
Laura Foll was appointed as co-manager alongside James Henderson on the £399m Lowland Investment Trust in November 2016 having joined Janus Henderson in 2009.
Lovett-Turner said: “Laura Foll is part of Janus Henderson’s highly experienced value and income team, working alongside James Henderson.
“I’ve been impressed by Laura’s deep stock specific knowledge and I expect her to have a bright future.”
Foll had been deputy manager on the fund before her promotion as co-manager last year, during which time the fund has returned 11.12 per cent, slightly ahead of the index.
Performance of trust vs benchmark since manager start
Source: FE Analytics
The fund aims to provide superior returns to the index with no more than half of the fund invested in FTSE 100 companies. It aims to have a third of the portfolio in large-cap stocks, a third in mid caps and the remainder in small caps.
In a recent interview with FE Trustnet, the manager said the current environment has been “frustrating” for managers trying to find new domestic-facing opportunities in the UK.
“There’s this constant debate about what is priced-in and what isn’t priced-in, and what we’re finding is that when the results come out and they’re bad, they aren’t priced-in,” she said.
The trust is currently trading at a discount to NAV of 7.3 per cent, is 12 per cent geared, offers a 3.3 per cent yield and has an OCF of 0.64 per cent, according to the latest figures from the AIC.
Ross Teverson - Jupiter Emerging & Frontier Income Trust
Anthony Leatham, head of investment trust research at Peel Hunt, suggested Ross Teverson as one of his two fund managers to watch.
The manager was appointed lead manager of the recently-launched Jupiter Emerging & Frontier Income Trust but has been at the firm since 2014, having joined the firm from Standard Life Investments as head of strategy for global emerging markets.
The manager is not new to his asset class but new to the investment companies sector, Leatham said.
“He is the lead manager on the Jupiter Emerging & Frontier Income Trust and joined Jupiter in 2014 having spent 15 years at Standard Life Investments, where he managed global emerging market equity funds and delivered returns which regularly put him in the top-decile of the open-ended peer group,” the analyst noted.
“This disarmingly intuitive focus on companies which are undergoing change, combined with an unconstrained mandate, accessing stocks from across the market cap spectrum and going beyond emerging into frontier markets, is expressed through a high conviction, concentrated portfolio.
“Ross takes a hands-on approach and is often found travelling to far-flung regions to meet with company management as part of his search for capital growth and income.”
Since launch – though its very short track record should be noted – the trust has trailed the MSCI Emerging Markets index by 35 basis points.
The trust is on a price premium to NAV of 3.5 per cent, is not geared, offers a 3.8 per cent yield and has a management fee of 0.75 per cent, according to the latest figures from the AIC.
Paul Major – BB Healthcare
Leatham’s other fund manager to watch is Paul Major, who is co-manager of another recently-launched investment company, the BB Healthcare Trust.
The trust was launched in December 2016 to provide capital and income growth from investments in global healthcare stocks, including a wide range of companies in the sector.
“Paul Major has made the transition from analyst to fund manager and was appointed as co-lead manager on the recently-launched BB Healthcare Trust,” the analyst said.
“Paul is not new to the healthcare sector, having spent 18 years covering the stocks in the universe, initially as an analyst and corporate financier at UBS/SBC Warburg and, more recently, as a research partner at Redburn.
“Paul is a biochemist by background and is supported by a team of highly experienced specialists at Bellevue Asset Management.”
He added: “We think that the combined experience of Paul Major, his co-manager Dr Daniel Koller and the wider team makes this strategy well placed to deliver double-digit annualised shareholder return through fundamental stock analysis and an unconstrained investment approach.”
The portfolio, which can have a maximum of 35 holdings and currently stands at 34, has performed well since launch, returning 18.02 per cent.
Performance of trust vs benchmark since launch
Source: FE Analytics
It is 25.8 per cent weighted to biotech companies, 24.1 per cent in medtech and 14.6 per cent in speciality pharmaceuticals.
The trust is trading at a premium to NAV of 3.7 per cent, is 4 per cent geared and has a management fee of 0.95 per cent, according to the latest figures from the AIC.