Adrian Gosden, co-manager of the £151m GAM UK Equity Income fund with Chris Morrison, speaks to Tom Eckett about the Brexit 'shambles' and the benefits of an agile fund in today's market environment.
Adrian Gosden joined GAM in September 2017 to launch a UK Equity Income fund after leaving a 13-year long stint Artemis in 2016, where he managed the £5.5bn UK Equity Income fund alongside Adrian Frost.
Prior to Artemis, he was a UK equity fund manager at Société Générale Asset Management for four years. He started his career at Fleming Investment Management.
Meanwhile, his co-manager Chris Morrison joined GAM in 2012 from the Bank of Tokyo Mitsubishi UFJ Asset Management UK, where he spent five years.
Last year was a challenging period for Swiss firm GAM, which overall has CHF139.1bn in assets under management, as investment director Tim Haywood was suspended, leading to the liquidation of its £5.6bn Luxembourg-domiciled unconstrained/absolute return bond funds (ARBF) and the departure of CEO Alexander Friedman.
However, the hire of Gosden and the launch of the UK Equity Income fund has been a shining light for the firm. Since the fund launched in October 2017, it has outperformed its peer group returning -2.4% versus -3.2% for the IA UK Equity Income sector, as at 8 February, according to FE.
What is your investment philosophy?
The investment process is one Chris and I are very familiar with - that is to focus on the free cashflow. It is not a new way of running equity income funds, but it is one that works.
The process involves screening companies for their cashflow and engaging with management during meetings.
When you are with management, this is where you need to use your skill to judge what they will do with that cash and how it will drive the dividend. It is all about stockpicking for us.
How does your fund differ from the rest of the UK equity income sector?
The product is battle-ready for 2019 and still very nimble, which allows us to move around the UK market. In funds I have run in the past, that nimbleness would not have been an option and I would have had to stick with my investments.
Some portfolios are unchanged over the past three years and I do not know how that can be, given the outlook has changed so much.
Five of our top ten holdings are different since launch - agility is a useful tool to have in your armoury. UK equities are really out of favour and although we have outperformed since launch, we have still returned a negative number.
2018 was not a year for celebrating and toasting, it was more a year to get this product set up and ready for investors to use when UK equities come back in favour.