Equities  

NewSmith Europe fund is the long and the short of it

NewSmith Asset Management has launched a new fund focusing on large-cap European stocks for UK and European investors.

The NewSmith European Fund, a Ucits long-short equity fund, will follow the same strategy as the company’s offshore long-short equity fund which posted a 29 per cent net return since inception in June 2007 versus the Eurostoxx 50 return of -29.1 per cent.

It will be domiciled in Dublin and have daily dealing in four share classes, Euro, US dollars, pounds sterling and Yen.

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In addition, it will be managed by Jean Maigrot, European equity investment leader at NewSmith Asset Management, who has 28 years of experience trading European equities.

He was previously the head of trading teams at Salomon Brothers HVB and ABN Amro before joining NewSmith Asset Management in 2007.

He said: “Many European stocks are trading at a wide discount to US equities. At the same time we are concerned about the outlook for European economic growth, so we see opportunities in long and short positions.”

NewSmith Asset Management, formerly known as NewSmith Capital Partners, was established in 2003.

Until February 2012, NewSmith Capital Partners was the parent entity of NewSmith Asset Management and NewSmith Japan, the main asset management businesses.

In February 2012, NewSmith was formed to acquire the asset management businesses previously owned by NewSmith Capital Partners.

It is 40 per cent owned by SuMi TRUST, one of Japan’s biggest institutional investors with $676bn (£429bn) of assets under management as at 30 September 2014.

Last month, Simon Roberts, NewSmith’s head of global equities, stepped down from his role after four years with the company.

He previously led BlueCrest Capital’s global equities team, and was a partner and senior managing director at Lazard Asset Management, heading the UK-based investment team.

He joined Lazard from Fidelity, where he ran the research department in London.

Neil Baker, global equity portfolio manager and analyst, was appointed as Mr Roberts’ replacement as leader of NewSmith’s Global Alpha fund and global equity investment leader.

Providers view:

Paul Roy, Chairman of NewSmith, said: “We have seen strong demand from investors for access to our long/short European investment strategy, and this, together with the growing popularity of Ucits structure, drove our decision to launch the fund.”

Advisers view:

Paul Milburn, investment analyst at Newcastle-based Lowes Financial Management, said: “The fund’s success is completely dependant on the individual who has been given the all-important responsibility to manage the fund. Proven ability in the long-short field is vital. Knowing what catalyses a fall in short stocks, when this might occur and knowing the best time to exit the short strategy is difficult. If the manager can prove his past experience in long-short stocks, then the fund would be an interesting proposition.”

Charges: 1.25 per cent management fee and a 20 per cent performance fee.

Verdict:

Managing a long-short equity fund is not a simple task, so prior knowledge and experience in equity trading is of paramount importance. NewSmith Asset Management has entrusted the management of the fund to Mr Maigrot, who appears to be a seasoned professional in this field with nearly 30 years of experience. His CV would undoubtedly reassure investors who are desperately seeking to maximise their investment.