RWC brings across Hermes managers and $800m Focus funds
RWC has signed a deal with European fund house Hermes which will see its $800m Focus fund range and the three teams running the products transfer to the boutique in October.
The range will be rebranded RWC Focus funds from this date and includes the Specialist UK Focus fund, managed by Paul Harrison, Nigel Davies and Phil Harris, and the European Focus fund, run by Maarten Wildschut and Petteri Soininen.
As well as the European Focus fund and Specialist UK Focus fund, the Japan Stewardship fund will also be transferred to RWC, which is managed in collaboration with Nissay Asset Management advised by Corinna Arnold and Michael Connors.
The London-based Focus teams, consisting of 12 members including fund managers and support staff who will all join RWC, have an investment process which identifies companies going through, or about to go through, transformational change. They aim to generate alpha by actively managing the positions, rather than selling out of poor performers.
The terms of the deal, which was signed in the last few days, have not been publicly disclosed.
Peter Harrison (pictured), CEO at RWC, said the Focus team’s approach to activist investing should appeal to investors looking for managers who go further than just handing a company cash in exchange for shares.
“The Kay Review told us that fund managers are not very good at understanding their investments and manufacturing the alpha. It is one thing to realise a company is cheap but it is another to go in and do something about it, which is why this team appealed to me. They can generate the company’s returns by influencing them,” he said.
Harrison added the range’s ‘constructive activist’ approach to investing will fit in with the philosophy behind the boutique’s existing products.
Although, due to the longer investment periods, the funds are mainly aimed at the institutional market, Harrison said he is looking at ways to package the products for wholesale investors.
“These kinds of investments do not tend to sit in a retail structure, but discretionary fund managers are increasingly focused on active fund management as opposed to trackers, so we think the techniques used on the Focus range are appropriate for the wholesale market. We need to work out how to structure the products. There are potentially a few ways, and we will be very active in speaking to our clients in this space.”
RWC, which has a total of $4.1bn under management, has a history of poaching high-profile teams from larger fund groups.
In May 2010, the firm hired three members of Schroders’ equity income team, Nick Purves, Ian Lance and John Teahan. They now run a range of funds with $1bn AUM. Later that year, RWC also recruited Threadneedle’s Peter Allwright and Stuart Frost from the absolute return bond fund team. The pair now run RWC’s absolute rates and currencies (ARC) range and a Macro Bond hedge fund.
Hermes, traditionally an institutional house, recently announced a push into the UK wholesale market and hired Rob Page from Ardevora as head of marketing and communications.
This article first appeared in Investment Week