AIC figures reveal longevity in closed-ended retail space

Only eight managers in the closed-ended retail space have achieved more than a 20-year tenure, according to new figures from the Association of Investment Companies.

Among them is Gartmore’s Brian O’Neill, who, with 27 years at the helm of the Global trust, is the longest-serving investment company manager.

The £129m portfolio has been a top performer over five years, generating a return of 103.6% to 1 June, compared to a Global Growth sector average of 47.9%.

The manager says: “One advantage of having a long track record is investors have the opportunity to track your performance over multiple market cycles.

“There are some who only perform well in a bull or bear market, which is fine if the investor is aware of this, but we try to perform well in all conditions.”

Also among the managers with the greatest longevity are Alliance Trust’s Matthew Strachan (25 years), Angela Lascelles and Matthew Oakeshott of the Value & Income trust (24), Franklin Templeton’s Mark Mobius (21) and James H Henderson, who runs Lowland (20).

Henderson says he has always run his UK growth and income fund with a bias towards small and mid-cap companies.

“Although this sector does have periods of underperformance, over the longer term it provides better income and dividend growth,” he says.

Meanwhile, Strachan says he uses “corporate memory” as a valuable investment tool.

“The ability to understand why the fund has got to where it has is important in terms of helping you make a decision on how you move forward,” he says.

Of the 147 funds across the six sectors surveyed, the average manager tenure is 6.6 years. This excludes team-managed funds.

In addition, there are 30 companies with managers who have been in charge of a fund for over 10 years, and 53% of managers have run funds for over five years.

Although the figures point to the longevity of investment trust managers, this year has seen a number lose their mandates because of poor performance. In February, Edinburgh Partners’ Dale Robertson took over the renamed European Investment trust from F&C.  Meanwhile, First State is due to take of control of the F&C-run Pacific Assets in July.