Mirabaud team headed by Philip Watson has been appointed as investment advisers on theClose Finsbury UK Growth fund
In keeping with our approach of selecting 'best of breed' investment managers, Close Finsbury Asset Management have recently appointed Mirabaud Investment Management (Mirabaud) as investment advisers to the Close Finsbury UK Growth fund. To more closely reflect the objectives of the fund, the fund has also been renamed the Close Finsbury UK Growth fund. The investment policy and objective of the fund remains the same.
Mirabaud are part of the Mirabaud Group, one of Switzerland's most prestigious and oldest private banking operations. Through their focused and collegiate approach, the team has built up an impressive track record of outperformance in UK equities.
Headed by Philip Watson, the team at Mirabaud currently manages a UK equities unit trust. Over the past five years, the unit trust was ranked in the first quartile of the UK All Companies Sector and has returned over 44%, almost 10% more than the FTSE All-Share.* Mirabaud has a strong following in the institutional market, and this expertise can now be accessed through the Close Finsbury UK Growth.
Philip is backed up by an team of five. Each member of the team is familiar with the fund holdings and no one member has sectoral responsibilities or responsibility for any stock. This is to ensure everyone is knowledgeable about the portfolio and that investment decisions are made on facts rather than emotional attachment. The team takes it in turns to visit the same company and, as a result, differing perspectives are challenged and group discussions ensure current positions are ratified or challenged.
There are three compelling reasons to invest in the Close Finsbury UK Growth fund:
1. Focused investment approach
The investment team believe in only holding a limited number of stocks in the fund, normally around 40. To a significant extent, these holdings represent the best ideas and enable them to seek to enhance performance by only focusing on those companies in which they have the utmost conviction.
2. Emphasis on capital protection
Although the investment team employs an active, aggressive approach the fund will retain a strong emphasis on preserving capital as the team are risk aware, not risk driven. There are formal constraints on sector and stock limits and the fund also has the ability to utilise covered call options on stocks within the fund if the investment team feels there is significant opportunity to increase alpha. This aims to produce a lower tracking error.
3. Experienced advisory team
Mirabaud are specialist fund managers focusing solely on UK equities. They have a highly experienced investment team of five, who have an average of 15 years' experience.
Philip explains: "Our experienced team and collegiate approach enables us to act quickly and decisively. We are 'fundamental' managers who seek to identify strong secure businesses with good management who demonstrate sustainable significant competitive advantage and achieve persistent and reliable cashflow and profit generation. The team here sees over 500 companies a year and although we run a concentrated portfolio of some 40 stocks we never invest before meeting the management."
"The Close Finsbury UK Growth fund is founded on a deep understanding of the companies in which it invests. The fund combines a focused, aggressive approach to stock selection with a firm eye on the preservation of investors' capital," he added.
The team has a robust investment process. When evaluating companies to include in the portfolio, they search for three characteristics:
Castle - sound businesses with honest, accessible and open management.
Moat - companies where their competitors face significant barriers to entry.
Goldmine - companies that generate positive free cashflow.
This process establishes the critical value drivers of the current and future stock price. Once these are identified, they are challenged by further research and quantitative analysis using a variety of valuation techniques depending on the company's industry group.
Rigorous portfolio guidelines are also in place to ensure risk remains well controlled. No more than 50% of the fund must be concentrated in any of the 'big four' sectors - banks, oil and gas, pharmaceuticals and telecoms. In addition, the maximum holding in any one stock is 10% and the minimum 1%.
The Close Finsbury UK Growth fund is designed to form the core of an investor's portfolio. Its active approach to stock picking and focus on preserving capital makes it a great choice for many types of client.
