Martin Currie loses Taiwan Opportunities fund to alumnus Chris Ruffle

Martin Currie Investment Management is to lose a $190m mandate to run the Taiwan Opportunities fund, as the fund’s board moves to appoint Chris Ruffle and Shifeng Ke, who are establishing an independent entity to run it.

The Irish-listed fund is presently run by Martin Currie, and focuses on Taiwanese undervalued growing companies capitalized at $500m or less, according to BestInvest.

The portfolio’s directors said in a statement yesterday they planned to transfer its management to “a new investment management business to be established by Chris Ruffle and Shifeng Ke”.

Andy Sowerby, Martin Currie’s managing director of sales, marketing and client service, said: “We note the board’s decision and will continue to manage the portfolio to create as much value for its shareholders as we can. We are fully committed to our China business and are actively recruiting new, talented managers to work alongside our existing team.”

The directors of the $192m Taiwan Opportunities fund added they hoped the transfer of management to the duo, in their new entity, would occur in November or as soon as practicable thereafter.

Ruffle and Ke were co-managers of the product up to 29 July, when Martin Currie said Ruffle would no longer conduct portfolio management functions for the Edinburgh-based firm.

Agreed by Britain’s and America’s financial regulators, this decision followed the firm’s review of “a potential conflict of interest in relation to an investment in an unlisted convertible bond issued by Ugent Holdings Limited”.

The duo ran money for the $16.2bn manager via a joint venture arrangement between Martin Currie and their own company, Heartland Capital Management.

On Ruffle’s departure, Shifeng Ke assumed his responsibilities alongside investment director James Chong and John Pickard, head of investment. He was supported by Brian Canavan, investment director in the Shanghai office, who helps run the research process.

Along with news of Ruffle’s departure came news Heartland was to exercise an option to buy Martin Currie’s interest in the joint venture, and with it the Shanghai-based research team.

Martin Currie is interviewing candidates to build its existing team in China.

The directors of Taiwan Opportunities also announced yesterday a redemption gate for the fund.

This limits to 25% the issued share capital that investors can redeem on the 26 August dealing day.

“The directors intend to seek to impose further limits on subsequent dealing days if they consider doing so to be in the best interests of the [fund] and its shareholders,” they added, noting the need to treat all investors fairly, while “seeking to maximise returns from the portfolio”.

Martin Currie declined to comment on the record for this story.

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