Euro Stars A-rated multi-manager Lee Freeman-Shor is set to add another value-orientated manager to his European equity strategy, Citywire Global can reveal.
Freeman-Shor said he intends to alter the 10-strong manager line-up on his €305 million Old Mutual European Best Ideas fund by adding an increased emphasis on value.
The Old Mutual European Best Ideas fund is overseen by Freeman-Shor, who manages a stable of 10 managers, each of whom produce a 10-stock portfolio of their best investment ideas.
Speaking to Citywire Global, the London-based manager said he intends to add an as-yet-unnamed manager who offers a different take on tapping value opportunities in the European equity market.
‘The fund at the moment has a growth slant and, as we have seen, growth has become expensive, so I want to put a bit more emphasis on value, which is going to be different type of value managers I currently have in the fund,’ said Freeman-Shor.
While Freeman-Shor could not be drawn on the exact name of the manager he intends to add, he did state it would be a manager capable of moulding with the existing set-up of the fund.
At present, Freeman-Shor said his main value investors are Liontrusts’ James Inglis-Jones, Damien Lanternier of Financière de l'Echiquier, Mandarine Gestion’s Marc Renaud and Crispin Odey of Odey Asset Management.
Despite Freeman-Shor remaining tight-lipped, potential candidates for the value manager spot could be drawn from a number of outperformers using this style at present.
For example, Vontobel’s Matthew Benkendorf and Brian Hall of BlackRock have both posted strong three-year performance, while Euro Stars A-rated managers Eric Bendahan of Syz & Co, Pictet’s Daniele Scilingo and fund selector favourite Nicolas Walewski of Alken AM could also be under consideration.
It was not revealed who the new value manager is set to replace in the line-up, although it is understood the four existing value managers will be retained while the two UK equity specialists – Richard Plackett and Daniel Nickols – are unlikely to be omitted due to recent outperformance.
This means one of the four more growth-focused investors could potentially give way. These are: veteran investor Dirk Enderlein of Wellington Capital Management; Rajesh Singh of Newton; Danske Invest's Henrik Husted Knudsen; and, Cedric De Fonclare of Jupiter.
The most recent changes to the fund saw Freeman-Shor add UK equity exposure through Daniel Nickols, also of Old Mutual, who was added to the roster at the end of 2012. He was brought in to replace Hugh Cuthbert of SVM.
This followed a decision to add Richard Plackett, a UK equity specialist at BlackRock, as Freeman-Shor sought to bring his allocation to the UK market up from a marginal position to a slight overweight.
‘The UK is now about 36% of the index and we have got about 40% because we could recognise the potential of being overweight here given the current status of the eurozone,’ he said.
‘This has proved particularly good timing according to the second quarter data. Over that period we are two percentage points ahead of the index and one of those points has completely been drawn from the UK equity managers.’
The Old Mutual European Best Ideas fund returned 38.58% in the three years to the end of May 2013. This compares to a 35.36% rise by its Citywire benchmark, the FTSE World Europe TR EUR.