Polar Capital builds on talented managers, not ‘hot’ strategies

Tim Woolley co-founded Polar Capital back in 2001 with the plan to grow the London boutique to about 12 stock picking fund management teams – a decade later, they have just one to go.

The 16 strategies Polar runs range from UK, European, Japanese, EMs, technology, healthcare and financials equities funds, to convertibles and market-neutral portfolios and, most recently, North American shares.

Woolley (pictured) does not name which strategy comes next. Not because he does not want to, but because the €3bn company always built itself from the bottom-up hiring talented fund managers, not top-down by selecting strategies then seeking teams.

In late 2010 some commentators questioned why Polar bought a $230m financials manager – HIM -when many financials faced bleak futures and tighter regulation.

Woolley explains: “We would rather hire excellent talent in an out-of-favour area than a mediocre manager in a hot market. We always wanted 10 to 12 fundamentally driven teams, focused on fund performance, offering clients something different to ‘Index-plus’ products.

“With HIM, we took a long term view about financials and there will continue to be opportunities there. The insurance fund has more than doubled in size to $329m since we took it on.”

They may also have asked similar questions about Polar’s first fund – long-only technology, which started in 2001 when dot.com was definitely out of favour.

Polar’s co-founder Brian Ashford-Russell managed it, having run Henderson’s technology equities strategy before this mandate moved to become Polar’s initial assets.

Then came Japan equities, managed by veteran James Salter.

Healthcare equities filled another niche, convertibles another.

“Our clients often have the core of their portfolio organised. They are looking for something different from us.”

Now navigating the third major market crisis in Polar’s life Woolley remains convinced talented managers will outperform markets consistently after fees.

“We have established ourselves as able to identify the right investment talent doing that, and we have differentiated ourselves in the alternative space in very challenging markets, too.

“Our teams are all experienced people with long track records, passionate about what they do. It is, for them, about having a degree of autonomy and freedom to shape their fund in the way best suited to their talent. They are aware of the index but not looking to be constrained by it.”

 

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