The Analyst: London doesn't have all the top teams
Saturday 15 September 2007
If your image of an investment manager is a fellow in the City of London wearing a public-school tie and bowler hat and carrying a brolly, then think again. These days, quite a few of them dress casually. And some of the best are not even based in the capital.
What matters is that an investment manager focuses on what is really important: successfully managing money for investors. If anything is allowed to get in the way of that – for example, the hustle and bustle and hassle of central London – then it is sacrificed.
The superb investment companies located outside London include Invesco Perpetual, for whom the highly regarded Neil Woodford manages more than £16bn from their Henley-on-Thames offices. Another is the exceptional team of UK specialists working for Rensburg, based in Leeds, West Yorkshire.
Rensburg does not advertise a great deal so it might be an unfamiliar name, but the firm has just as much knowledge and talent as their better-known peers. The UK team comprises Mark Hall, Paul Spencer, Stuart Sharp and Colin Morton. I have often said that operating small teams with short lines of communication is the best way to manage money. I was therefore intrigued when Rensburg launched a new fund last year – the Rensburg UK Managers' Focus Trust – that pools the knowledge of these four quality managers.
Each manager is responsible for a quarter of the portfolio and is tasked with selecting only their best ideas. The portfolio is designed to be well diversified across the market because each manager is an expert in a different area.
Colin Morton and Stuart Sharp invest in large and small companies respectively, while Paul Spencer specialises in the medium-sized firms of the FTSE 250 Index. The final component of the fund is run by Mark Hall, who is free to choose any stock from the UK market; he is ideally suited to this role as he has one of the best track records of any manager in the country.
This structure results in a focused portfolio of around 50 stocks. The managers work closely together to help keep the portfolio balanced. For example, if they were all extremely bullish on mining stocks, they would decide how to divide up the opportunities between them. This helps to ensure that the portfolio doesn't become too biased towards a narrow range of sectors, which would only add to the risk and volatility of the fund.
The largest sector positions at present are 12.21 per cent in support services, 8 per cent in real estate and 6.36 per cent in air and defence. In terms of individual stocks, the biggest holdings are Cobham (defence) at just under 3 per cent, Southern Cross (care homes) at 2.7 per cent and GlaxoSmithKline (pharmaceuticals) at 2.6 per cent. You can see, therefore, that no single stock or sector will have a massive impact on the performance of the fund.
The structure of the fund means that it is likely to have a slight natural bias towards small and medium-sized companies. The reason for this is that, because of the sheer volume of companies in those areas, plus the fact that they get less coverage from analysts, Mark Hall is more likely to be able to find anomalies and undervalued companies.
In my opinion, Stuart Sharp has done a particularly good job during the fund's first year; his stock ideas have really helped to boost the fund's performance. He doesn't pay much attention to market timing (indeed, none of the four managers does), but he did start to sell many of his most successful holdings in July when they reached his price targets. This meant that by the end of July his part of the portfolio had almost 17 per cent in cash (the fund as a whole had 11 per cent in cash), which provided some support as markets fell during August.
In conclusion, what you get with this fund is an extremely talented team of managers who have bags of common sense, who will meet any problems head on, and will come to sensible decisions. The managers have an incentive to perform because they have their own money in the fund, and also because they are dedicated professionals who want to do the best job possible for their clients.
I fully expect the team and the fund to go from strength to strength. If you are looking for a high quality UK fund that invests across the market, then this is one fund that merits close attention.
Mark Dampier is the head of research at Hargreaves Lansdown, the asset manager, financial adviser and stockbroker. For more information about the funds included in this column, visit www.h-l.co.uk/independent
- 1 Woman falls to her death as she celebrates marriage proposal at the edge of Ibiza cliff
- 2 Venezuela Expo Tattoo 2015: Extreme body art from 'Vampire Woman' to 109mm earlobes
- 3 Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
- 4 Dad attempts revenge on teenage daughter, plan backfires spectacularly
- 5 Ball pool for adults opens in London
9 reasons Greece's experiment with the radical left is doomed to failure
Have we reached 'peak food'? Shortages loom as global production rates slow
Greece elections: Syriza and EU on collision course after election win for left-wing party
British grandmother Lindsay Sandiford faces execution by firing squad in Indonesia
Liberal Democrat minister defends comments suggesting immigration causes pub closures
King Abdullah dead: We can't afford not to hold Saudi Arabia's royals to account
iJobs Money & Business
£40000 - £50000 per annum: Recruitment Genius: This is an exciting opportunity...
£30000 - £35000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...
£13000 per annum: Recruitment Genius: This Pension Specialist was established ...
£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...
Day In a Page
A minimnalist four-bedroom home designed to the highest spec, featuring glass walls and a kitchen space lit by a glass roof
Hibernate during winter and make your living during the summer at this busy guesthouse with panoramic sea views, in the village of Lynton
A four-bedroom penthouse next to the Tate with direct views of St Paul's from two floors of luxurious living space
A four-bedroom detached home surrounded by spacious gardens and woodland, close to New Pudsey
An 18th-century, three-bedroom home near Langstone Harbour built from ships beams with vaulted ceilings and wood burning stoves
A five-bedroom semi-detached home with a mix of period and modern features in a popular and convenient location
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
A three-bedroom villa with self-contained flat, minutes from Lake Windermere
A deceptively spacious, beautifully presented Georgian home with 3000sq ft of living space and five reception rooms
A five-bedroom Victorian home with four receptions, superb gardens and paddock in Pembury
An eight-bedroom house on the south side of the The Green with cinema, wine cellars and summer house
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
A three-bedroom, 15th-century cottage with original features in the picturesque village of Sissinghurst
A six-bedroom terraced house with large south-facing roof terrace, cinema room and wine cellar
A new seven-bedroom home built in Queen Anne-style with swimming pool and parkland views in Mortimer
A listed, four-bedroom farmhouse in the rural hamlet of Rushall with detached barn, four acres of gardens and paddocks
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion