Opinion  

Farewell to maverick fund manager McClure

John Kenchington

It’s always tragic to hear that somebody has died before their time and last week’s news that Unicorn’s star manager John McClure had died at the age of 50 was very sad.

By all accounts Mr McClure was a man who refused to pander to the orthodoxy of the asset management establishment. As Sanlam’s Paul Surguy put it: “He didn’t fit the traditional mould of fund manager; I’m not even sure if he owned a tie”.

He also refused to disguise his disdain for fund managers who failed to put their money where their mouths were by making active bets against their benchmarks.

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Give me a fund manager who values substance over style any day of the week.

From a professional perspective, his loss is also a major blow to the industry because it’s difficult to overstate just how well he had been doing for his clients.

His four Unicorn-branded open-ended funds are all comfortably top quartile in terms of their returns in the past five years, according to FE.

You could argue that the manager’s focus on smaller companies simply saw him outpace rivals in the recovery period since 2009.

But his UK Smaller Companies fund is based in the IMA’s small-cap fund sector – and its 232.8 per cent return in the past five years ranks it fourth out of 51 funds. So clearly he must have been doing something right.

The market certainly thought so, with his flagship UK Income fund

rocketing from just £31m under management three years ago to £716m this month.

The manager also ran the 70 per cent equity portion of the Unicorn Acorn investment trust, which this time last year was able to expand its net asset value by almost 25 per cent due to share offers.

In the 15 years Mr McClure ran the trust it rewarded investors with a mighty share price total return of 849 per cent – that’s up there with the achievements of managers like Philip Gibbs.

His death from a short-term illness appears to have come out of the blue.

Unicorn had big plans for the future and was preparing to launch a UK special situations fund for the manager later this year.

On June 9, shares of the Acorn Income trust shed 5.1 per cent of their value on the news. Initial FE data suggests the sizes of the open-ended funds are falling.

However, luckily for Mr McClure’s partners at Unicorn, the firm has been developing succession plans, by foregrounding in-house rising stars Simon Moon and Fraser Mackersie, since 2011.

In a promising sign for Mr McClure’s admirable legacy, long-term backer OCM Wealth last week announced it did not intend to make changes as a result of the news. Let’s hope others take the same view.

John Kenchington is editor of Investment Adviser