Heptagon offers UCITS version of US fund

Mayfair-based Heptagon Capital is making the skills of Texan equity manager Yacktman Asset Management available to non-US investors for the first time by launching a Ucits version of the Yacktman US Equity fund

Heptagon plans to make its Heptagon fund available initially on a private placement basis, starting with UK early next year, but could widen its distribution channels further throughout Europe in due course.

The $3bn (£1.9bn) large cap portfolio that the Ucits und will feed into made about 240% from January 2000 to October 2010.

It did so on roughly the same volatility as the S&P 500 index, which fell in value by 2% over the same period.

The fund is ranked in the top 1% of its peers in Morningstar’s US large cap value sector over three, five and 10 years.

The investment team, headed by CIO Donald Yacktman, adopts a bottom-up, value-focused strategy without benchmark constraints. He typically invests in fewer than 50 companies, seeking cheap entry points in solid businesses with shareholder-oriented managers.

In the second half of 2010, the fund has been most heavily overweight in consumer discretionary and consumer staples, which together comprise about half its assets. It is most heavily underweight technology, industrials and financials.

Tarek Mooro, Heptagon’s chief executive and one of its three founding partners, said: “We have never bought in to the common refrain that the US equity market is too efficient for traditional stock pickers to produce alpha, and the relative performance of Yacktman since 1992 is a clear reflection of this.

“Their willingness not to focus too closely on the benchmark is also an investment approach that appeals to us.”

Yacktman, who has co-managed the fund since 1992, said: “We are very pleased to bring our investment process to a wider geographical investor base.”

He has invested in US equities for 40 years, and turns over about 30% of the flagship fund each year. Sector exposure is limited to 25%, and no position may be over 10%.

Once the subscription period for Heptagon’s fund opens on 1 December, investors will be able to approach the Mayfair-based firm directly with subscriptions of at least $250,000. After the three week offer period ends on 20 December, the minimum is expected to fall to $15,000.

Sterling and euro share classes will be created if demand justifies this, but Heptagon director Warwick Ryan said initially only a US dollar class would be offered.

David Walker

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