Investment industry veteran and multimillionaire financier Alan McFarlane is staging a retail debut for his recently launched Dundas Global Investors boutique.
The Edinburgh-based group has launched the Heriot Global Equity fund to harness the 33-year experience of Mr McFarlane, who will apply his ‘buy-and-hold’, benchmark- unconstrained global equity approach to the UK retail market.
Mr McFarlane was formerly chief executive of Walter Scott & Partners and walked away a multimillionaire after the firm was bought out by Mellon Financial in 2006.
He honed his global equity investing process after becoming chief investment officer of Global Asset Management in 1992.
Mr McFarlane has founded the new venture with Russell Hogan, the former chief executive of Aegon Asset Management UK – now Kames Capital – and former chief executive of Royal Liver Asset Management, which merged with the Royal London Group in 2011.
The new fund will carry a minimum investment requirement of £10,000 and an annual management fee of 0.65 per cent, which the team is looking to cut when the fund builds scale. It also has an expected ‘ongoing charge’ level of 0.75 per cent.
T Bailey is acting as authorised corporate director for the new fund, which launched late last month.
Mr McFarlane is set to hire a business development manager tasked with adding the fund to platforms once the strategy has bedded in. It has been seeded with £22m of internal money.
The industry stalwart first set up Dundas in 2010 and it has already won significant institutional mandates since becoming FSA-authorised in 2011, including the running of a £120m Australian pension fund mandate for a company called Apostle.
The Heriot fund’s largest geographical weighting is in the US, which comprises more than 40 per cent of the portfolio, while the rest of its holdings are broadly spread globally.
Mr McFarlane said: “We don’t believe in just investing in emerging markets or developed markets – we don’t want to trap ourselves in these obsolete categories.”
He added that his strategy targets companies with a market size of at least $1bn.
The portfolio consists of between 70 and 80 stocks that the managers believe can show reliable growth and consistently increase their dividends at a rate above inflation in the long term.
The launch has already attracted attention from advisers with Alan Steel, chairman at Alan Steel Asset Management, expecting the fund to be a core investment in a portfolio because of its focus on international companies with growing dividends.
McFarlane returns
This isn’t the first time Alan McFarlane has had to start from a low base, after turning the $2.7bn Walter Scott & Partners business into a $34bn giant in his six years as chief executive. The Heriot fund follows the same style used by Mr McFarlane there, looking to generate long-term capital and dividend growth by investing in global equities on an unconstrained basis.
