Funds update: JOHCM, JOHIM, Pioneer, RWC – update, Skyline, SGSS
Syme and Wimborne set for launch of second JOHCM emerging markets fund, JOHIM lowers entry for A class shares within portfolio fund, Pioneer merges absolute return equity fund into Lux funds umbrella, RWC’s convertibles Ucits reaches out to Asian appetite, Skyline uses MontLake platform for global Ucits, SGSS offers KIID production in all European languages.
J O Hambro Capital Management (JOHCM)
Former Barings duo James Syme and Paul Wimborne are gearing up for the launch of the firm’s second emerging markets fund, which will invest globally.
Using a top-down approach by looking foremost at countries and then seeking mainly large cap, high quality blue chip stocks within those markets, the fund will follow a similar strategy to that applied when the two managers worked at Barings.
Syme described China and India as the “forerunners” in the fund’s soon to be launched portfolio. “There will be a focus where markets and central banks can influence growth,” said co-manager Wimborne, citing Indonesia and Malaysia as other examples of countries capable of “efficient and effective growth”.
Chinese banks are included within the fund’s portfolio, “one of the most unloved parts of our asset class”, said Syme. According to Wimborne, that view is controversial, but the two managers believe bad news has already been priced in to those stocks. “They have some bad debt, but not as bad as anticipated,” he said.
The fund is limiting up to 5% of its investment directly in frontier markets, but it may access those markets in other ways, the managers said.
The two managers, who met in 2003 on a research trip to Hong Kong and whose paths crossed again in 2006 at Barings, said they see 2500 investable stocks available but they are retaining a portfolio of 50.
Underweight allocations include utilities, Chinese property, Korea, and Turkey, as those sectors and regions are not viewed as having enough growth capacity.
Target size for the fund is $3bn, in contrast to the $5bn fund run by the duo at Barings. It begins investing on Thursday at midday (GMT).
It is JOHCM’s second emerging markets fund, following one created for Emery Brewer and Ivo Kovachev in April this year that has gathered $600mn from investors.
The two funds differ in terms of process, style and outcomes, said JOHCM chief executive Gavin Rochussen. The first fund concentrates more on small caps.
The latest move marks a shift in the firm’s emphasis toward emerging markets from three years ago when its investments focused on the UK and Europe.