Mark Martin to leave Liontrust as funds handed over to Cross and Fosh
UK Mid Cap and UK Opps funds affected
Manager of the £88m Liontrust UK Mid Cap and £10m UK Opportunities funds Mark Martin has been placed on gardening leave "with immediate effect", following the news that his funds will be rolled into star duo Anthony Cross and Julian Fosh’s £480m UK Growth vehicle.
Liontrust UK Growth, which has been managed by Cross and Fosh since its launch in 2009, aims to achieve capital growth over at least five-year periods through a relatively concentrated portfolio of 44 stocks from across the market cap spectrum.
It does so through the managers' Economic Advantage process, which aims to find companies with hard-to-replicate characteristics such as intellectual property, strong distribution channels and significant recurring business.
Martin's UK Opportunities and Mid Cap funds, which he launched at Neptune in 2006 and 2008 respectively, also have minimum five-year investment time horizons, although both portfolios are more concentrated at 28 and 23 holdings respectively, and do not invest in large caps.
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A spokesperson at Liontrust said: "We believe the merger, which is subject to investor and regulatory approval, is in the best interests of investors in these UK equity funds.
"Investors will benefit from the economies of scale of a larger fund and the long track record of Anthony and Julian and their proven Economic Advantage process."
While Liontrust UK Mid Cap has fared well over the last decade with a top-quartile total return of 136% compared to the FTSE All-Share's gain of 77.4% according to data from FE fundinfo, it has suffered from torrid performance over the last three and five years, having underperformed the index by 19 and 29.3 percentage points respectively with losses of 24.7% and 15.2%.
Liontrust AUM up 20% to £19.3bn
Martin's UK Opportunities fund has also languished in the bottom quartile over three and five years, having lost 16.3% and 6.4% respectively.
A primary contributor to the funds' underperformance has been their long-term holding in sausage casing manufacturer Devro, which has seen its share price fall by 13.8% and 27.9% over three and five years. The stock accounts for 9.8% of both the Liontrust UK Mid Cap and UK Opportunities fund individually.
Fosh and Cross's Liontrust UK Growth fund has achieved top-quartile total returns over three, five and ten years, having gained 151% over the last decade. It has also managed to achieve almost half of the losses suffered by the FTSE All-Share, having fallen by 8.9% while the index tumbled 16.2%. The fund's largest holdings currently include the likes of AstraZeneca, Diageo and GlaxoSmithKline.
The merger of the three funds comes less than a year after Liontrust acquired Neptune, which led to all funds being rebranded under the umbrella heading Liontrust global equity team, which is headed up by former Neptune CEO Robin Geffen.
The firm is also set to acquire asset management firm Architas, which will create a multi-asset multi-manager business with £6.6bn in assets under management and advice.
Alongside Liontrust UL growth, Cross and Fosh also head up the firm's £5.5bn Special Situations, £1bn UK Smaller Companies and £91m UK Micro Cap funds - the former two of which were launched in 2008, while the latter was launched in 2016.
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