| Small caps offer stellar performance Most investors just hope for double-digit returns, but this week IAM hears from one fund manager who has managed to deliver triple-digit figures, explaining that a focus on cash flow is the recipe for success.
The Eric Sturdza Investments’ Strategic European Silver Stars Fund has outperformed its benchmark by 56.56 per cent in the three years to 22 February and returned 111.55 per cent since launch in 2015, and Bertrand Faure, portfolio manager tells us this is all down to ignoring macroeconomic conditions.
In fact, Faure accuses managers who deliver market forecasts as liars, adding: "If I knew where the market was going, I would not spend my time talking to 500 companies every year. I would buy and sell futures, my day in the office would last 30 seconds and then I would go and play golf."
Faure’s argument is based on the importance of companies’ ability to repay debt – something that relies heavily on available cash – and say this is even more important when rates are rising.
Looking at the performance so far, it’s hard to argue.
This week we also hear from David Vafai, CEO, and co-founder, of bfinance who tells IAM managing editor Beverly Chandler about the importance of genuine independence.
Vafai says that bfinance, which has recently completed a management buyout from Baird Capital awarding half the employees with equity participation in the firm, refuses to follow the manager rating models so popular with other investment consultants.
Instead, they take a whole of market approach to find the right service providers and have so far resisted the urge to offer fiduciary or asset management themselves.
"You have financial institutions that are offering advisory support to investors but also selling them asset management products, which can be challenging as incentives aren’t aligned," Vafai says. "These firms have a lot of great people and offer lots of different solutions, but it’s not as easy to be on the side of the client when the best solution for them might not be the most profitable solution for you."
Talking of profitability, vowel-rejecting asset manager abrdn has sold its discretionary fund management (DFM) business to LGT for GBP 140 million.
The sale of abrdn Capital sees the transfer of approximately GBP6.1 billion in assets under management and approximately 140 employees to LGT.
Richard Wilson, CEO Personal at abrdn, says: "DFM is a high quality, profitable business with a strong client focus and a brilliant team. However, in line with the way the market is moving, it needs greater scale and will be a better fit for LGT."
In other news this week, IAM’s sister title, ETF Express, has announced it is collaborating with IMpower FundForum, Europe’s largest asset and wealth management event, on its ETF sessions this summer in Monte Carlo.
To see the current agenda please click here.
Delegates can receive a 10 per cent discount using this code FKN3253EMSPK, following this link and asset managers can receive a further 50 per cent discount.
Gill Wadsworth, Editor
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