Chelverton Asset Management is launching new fund to take advantage of some of the opportunities created by MiFID II.
The Chelverton European Select Fund will be co-managed by Dale Robertson and Gareth Rudd, who joined the firm in October 2017, and will launch in early March. Chelverton will the use the new Fund to invest in the main markets of Europe ex-UK, with an unconstrained Multi-Cap strategy. The portfolio will feature four buckets: large cap value, cheap structural growth, mid & small cap value and sell side vacuum.
Commenting on the launch, Robertson said “Our opportunity is to apply a Modern Value Investing approach. A decade of free money has led to the repetition and extension of very common behavioural mistakes, namely overpaying for growth and a failure to address structurally challenged businesses. Our approach aims to be ‘value without the traps’. We see both structural and cyclical inefficiencies in markets and are excited about the opportunities this presents.”
The sell side vacuum looks to take advantage of changes to regulation, more specifically MiFID II. “As a result of MiFID II, sell-side research capacity will be gradually withdrawn at the smaller end of the market,” Roberston added. “This will create a vacuum and bring about mis-pricings, which will in turn create opportunity. As that opportunity will for the most part be in Small Caps, very few managers will be able to capitalise, and we will therefore limit the capacity of the strategy to ensure we can continue to benefit.”
Robertson and Rudd joined the UK small & mid-cap house last year from Edinburgh Partners and Willis Welby respectively.
The duo, who met at Edinburgh Fund Managers in the 90s, will bring more than 40 years’ combined experience, both buy side and sell side, to investors in the IA Europe ex UK sector. Robertson spent three years with SWIP, before moving to value house Edinburgh Partners; where he was for building the European business to some £1.5bn over a 13-year period. Rudd meanwhile spent six years with ABN AMRO Bank managing European long/short strategies, and a further seven years helping to build independent research provider Willis Welby, where he focused on ‘deep-dive’ cashflow analysis; the two enjoyed a broker/client relationship during this period.
Rudd added: “We want to pick stocks and run money, and at Chelverton we have been able to plug into a well-established infrastructure, with a pedigree of growing top-performing new funds.”
Copyright © 2018 RegTech Analyst
Copyright © 2018 RegTech Analyst
