Martin Currie plans fund closures and one conversion

Martin Currie has revealed two fund closures, affecting its Pan European Alpha and Global Financials funds, citing a manager re-shuffle in the first case, and insufficient asset size in the second case.

It is shutting its Global Financials fund, according to a stock exchange announcement from the fund’s board, “as the net asset value has fallen below $10m”.

A spokeswoman from Martin Currie said the fund held only internal money, and no cash from external clients.

The board of directors noted they had agreed with the investment manager a compulsory redemption on 31 October.

The filing came as it was revealed the Edinburgh-based manager will shut down its £18m Pan European Alpha Sicav, after news of the pending departure of co-manager Eric Woehrling.

He headed the Pan European portfolio with Pal Chidambaram.

Separately Martin Currie announced last week it will convert its £17m European fund into a European Income fund, as part of its product strategy review, announced last year, to focus more on global and income strategies.

Andy Sowerby, managing director, sales, client service and marketing, said: “There is a strong case for global equity income, given the opportunity set, choice and diversity that such strategies offer. With the UK representing less than 8% of global equity markets, UK-focused investors are missing out on a breadth of opportunities in overseas markets. A single country approach, particularly if focused on one strategy such as high dividend yield, can increase risk through a lack of diversification.”

European dividends have been predicted by some fellow managers to grow this year by up to 16%, despite the eurozone’s debt problems, with Germany tipped to hit new high distributions this year and 2013.

Chidambaram will run Martin Currie’s European income fund alongside Ross Watson, who has run equity income for charities at the $16.2bn asset manager.

Watson previously ran the Securities Trust of Scotland, but when the board changed the trust’s mandate in May to target “rising income and long-term capital growth by investing in global rather than UK equities”, equity income specialist Alan Porter became lead manager.

Both the closure of one fund and conversion of another are subject to regulatory and shareholder approvals.

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