Multi-assetJul 1 2015

‘Safety first’ Gottex launches multi-asset fund

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Gottex Asset Management has launched a multi-asset fund for growth, targeting returns of between seven and 10 per cent over rolling three- to five-year periods.

The Gottex Multi-Asset Growth Fund will invest across a broad range of assets including global equities, fixed income, emerging markets, real estate, infrastructure, commodities and hedge funds, with a tilt towards alternatives, the firm said.

Launched with an external seed investment of US$50 million (£31.7m), it will be managed by James Hughes, who joined Gottex from HSBC last year to develop Gottex’ range of multi-asset solutions.

Mr Hughes was previously group chief investment officer of HSBC Insurance, responsible for more than US$95bn (£60.3bn) of assets across 14 countries globally.

The fund will offer A-shares with a minimum subscription of US$1,000 (£634) with management fees of 0.65 per cent a year, and I-shares with a minimum subscription of US$5m (£3.17m) with management fees of 0.5 per cent.

In addition, a special founders’ share class is available until assets reach US$100 million.

Mr Hughes said: “Our philosophy centres on a ‘safety first’ approach, seeking alternative sources of return by identifying opportunities across a diverse range of asset classes and geographies. This enables us to both protect and grow assets over time, and we believe will appeal to a wide range of investors as a core allocation to meet their long-term investment goals.”

Provider view

Arpad Busson, chairman of Gottex, said: “Gottex has a long and successful history of leveraging unique relationships with asset managers to access the best talent, as well as allocating investors’ capital across asset classes in an efficient and cost-effective manner.

“We have applied these skills to create an extremely compelling multi-asset fund catering for investors who are increasingly concerned about market dynamics, given the relatively high valuations across many assets classes at present.

“Furthermore, we believe multi-asset solutions are ideally placed to meet the demands of increasing levels of complexity across investments coupled with heightened regulatory oversight and governance requirements, at the same time as providing attractive returns to investors.”

Adviser view

Michelle Gibbs, chartered financial planner at London-based Helm Godfrey, said: “I do not tend to recommend passive funds, so this is not something that I would look at. However, the A-shares charge is quite competitive for a multi-asset fund. I can imagine there being a demand for the product because it is diversified and aims to generate a good return.”

Commenting on alternative investments, Ms Gibbs said: “Clients like to understand what they are investing in. I would say that these types of investments are fine as a small part of a wider diversified portfolio.”

She added: “I think the fund manager’s reputation is particularly important in the active market. Investors will want to see that fund managers have a history of meeting targets.”

Charges

0.65 per cent a year for A-shares.

0.5 per cent a year for I-shares.

Verdict

A multi-asset fund which invests in a wide range of asset classes would appeal to investors in the market for medium- to low-risk investments. The targeted return and the annual fee on the product further strengthens its appeal.

However, some investors might be put off by the firm’s skew towards alternative investments. For the lay investor, alternative investments may prove to be too complicated and illiquid, despite the potential for high yields.