The group has run an African equity fund for three years, backed primarily by Asian and South American investors.
Now it is seeking to hit the mainstream in the UK with new funds run by big-name hires Mike Sell from F&C Investments and former Barings head of global emerging market equities Roberto Lampl.
Mr Sell, who joined from F&C in January, will run the Alquity Indian Subcontinent and Alquity Asia funds. Mr Lampl also joined the group in January and will run the Alquity Latin America fund. All three funds will launch on April 2.
Chief executive and founder Paul Robinson said: “We’ve spent three years proving that the process works, and we feel that we have done that and can take it to other markets.”
On top of environmental, social and corporate governance (ESG) and corporate social responsibility factors involved in the funds’ investment processes, Alquity also donates 25 per cent of all revenues from fund management fees to micro-financing projects in the regions it invests in.
“We’re looking to help people who are poor just because of where they were born,” Mr Robinson said. “It is very hard for them to lift themselves out, but if they get money then the first thing they do is go out and buy a mobile phone, or go to a shopping centre – and we own companies in these spaces.”
Mr Lampl said his fund was likely to be similar to portfolios he ran at ING, including his successful ING Invest Latin America fund, which gained 249.2 per cent in the five years until his departure in 2010, according to FE Analytics.
He said: “We’re going to have a very low turnover and at most 15 per cent invested in the benchmark. There will be more in medium-sized companies that we think can double or triple in the next few years – the big companies have grown up already.”
As well as equities, Mr Lampl said the fund would hold selected fixed income securities if they were sufficiently attractive.
Mr Sell’s products will reflect his specialism in companies based in India and the Indian sub-continent, which includes Pakistan, Bangladesh and Sri Lanka.
The three funds have ongoing charges of 1.1 per cent on their sterling ‘R’ share classes. They will also charge a 15 per cent performance fee with a hurdle rate of 3 per cent above 12-month Libor.
The products are Luxembourg-based Ucits-compliant funds, and will be available on a number of advised and direct platforms including Skandia, Cofunds, Transact and Axa Elevate.
Alquity was founded by Mr Robinson in 2010. In his earlier career he held marketing roles at Standard Life Investments and Skandia.
A new approach to ethical investing?
Alquity will be going up against established ethical fund management offerings such as Ecclesiastical’s Amity range and ethical funds offered by Kames, Aberdeen and Standard Life.
But founder and chief executive Paul Robinson is determined that Alquity – named after a combination of ‘altruism’ and ‘equity’ – does far more than simply screen stocks for ethical criteria.
Each of Alquity’s funds puts 25 per cent of its fee revenue into micro-financing projects, run by charity groups on the ground in the countries the funds invest in.
“Investing for the best growth, for long-term returns and reducing tail risks as well as putting back into the economies we invest in, gives us a level of access you wouldn’t normally get, because the companies we see understand our business model,” Mr Robinson said.
New head of Latin American investments Roberto Lampl added: “I’ve seen how the micro-financing works – it is fantastic how it empowers women to build businesses.
“If we can deliver strong performance with lower volatility compared to the peer group, then we can build a business that generates revenues to help individuals.”
Alquity’s fund manager line-up
Roberto Lampl, head of Lat Am investments
Mr Lampl, a specialist in Latin American equities, left Barings in June 2013 after little more than three years. Initially head of Latin American equities, he went on to lead the group’s flagship Global Emerging Markets fund after the departure of James Syme and Paul Wimborne.
Mike Sell, head of Asian investments
Mike Sell ran F&C’s Asian Alpha fund alongside Ben Akrigg, stepping down in January to join Alquity. Mr Sell began his career at Barings, leaving his role as director of emerging market equities in 2004 to join Thames River Capital, which was later bought by F&C.
David McIlroy, head of African investments
Like Mr Sell, African equity fund manager David McIlroy also spent 10 years at F&C, where he ran several portfolios covering emerging markets, South Africa and the Middle East. He joined Alquity in 2010 from infrastructure specialist Utilico Emerging Markets.
