March Gestión de Fondos (MGF), the boutique asset management arm of Madrid-based Banca March, is poised to start selling its Sicav fund range in the UK, having already expanded into Austria and Italy. Germany and Switzerland are other imminent targets.
Transparency is reflected in the opportunity for main shareholders to participate in the quarterly investment committees.
On the flagship €455m Torrenova fund, a global balanced equity structure which most clearly reflects the experience and historic involvement of the March Group, the annual management fee is 0.7%, and there are US dollar and sterling share classes, both hedged back to the base Euro currency.
The dynamic asset management model follows two basic concepts: value investing and a long term commitment. Torrenova is managed with an absolute return strategy, with an objective return of Euro CPI plus 2% and volatility of less than 6%.
The portfolio is constructed across diverse asset classes to minimise market risk and is not limited by geographic area, sector or financial instrument. Fixed income holdings provide stability and yield, with a maximum of 5% per issuer in each portfolio, while the 20-60 equity holdings are continuously screened, but bought with medium to long term investment horizons.
“The cash position is on average 10% but could be 100% if conditions warrant it,” explained Jimenez. “We do not use financial leverage — derivatives are only used to hedge portfolios or specific investments. This is not a hedge fund.”
Fixed income holdings at the moment are in public or corporate debt and the portfolio has been reducing duration over the past year. It now holds no instruments with a maturity of more than five years. Global equity stocks tend to have Betas lower than the market, and over the past two quarters the fund has had a lower equity weighting than its historic norm.
Another fund to be offered more widely this year is the €55m Vina Catena fund, a global fund investing exclusively in wine- related stocks. Investing in fine wine has been regarded as a profitable, but niche opportunity for main high net worth investors.
But Jiminez says that institutions are highly interested in a fund that outperforms its benchmark consistently, with volatility just half that of a global equity fund, and offering low correlation with most other asset classes.
The original Spanish share class was launched in 2009, with the Luxembourg one a year later. The managers are Francisco Javier Pérez Fernández and José Antonio Méndez, both with backgrounds in equity analysis.
There is a growing global trend in favour of good-quality wine and companies operating in the value chain are enjoying strong growth in sales and are maintaining high margins. Imports have rocketed thanks to growing demand in emerging markets and new markets.
Historically, the risk/return profile of the beverages sector has been much more attractive than the MSCI World index. Investment is via companies which have an attractive valuation, are well positioned, or have a competitive edge, and whose fundamentals remain solid over long periods.
The managers do not follow a benchmark or any set limits in terms of sector or geographical weights. Companies are selected only once the team has gone through a rigorous process of fundamental analysis.
“As value stock pickers, we are very aware of what we pay for,” said Jiminez.
The investment process is informed by the fund’s four-strong Advisory Board, comprised of experts from different disciplines within the wine world (see Box).
The input from the Board complements the managers’ knowledge and helps identify trends, innovation, advantages and investment ideas. It meets quarterly with the Investment Team of MGF.