Edmond de Rothschild Asset Management has launched a UK Equity fund, aiming to exploit the upside of companies which are bid targets or are restructuring.
The Edmond de Rothschild Fund UK Synergy looks to take advantage of the “flurry of M&A activity” that is anticipated following the UK’s referendum on its future membership of the EU.
The Ucits fund, domiciled in Luxembourg, will be managed by Philippe Lecoq and Olivier Huet and will follow the same investment process as their €1.4bn Edmond de Rothschild Fund Europe Synergy strategy, which currently holds around 30 per cent of its assets in the UK.
Mr Lecoq said : “In the lead up to the EU referendum in June we believe that M&A activity will be slightly constrained but for the mid-term, we are expecting a flurry of M&A activity post the referendum vote when uncertainty recedes.
“Corporate activity will remain strong this year and into 2017 as this kind of cycle tends to last between three and four years. The combination of weak growth outlook and low inflation is a big incentive for corporates to transform their portfolio of assets and/or to consolidate some of their activities.”
Dan Lee, head of UK wholesale at Edmond de Rothschild in London, said: “In an environment where there is an enormous choice of UK equity funds, the dual approach of targeting M&A bid targets and restructuring/turnaround companies stands out as a compelling, differentiated investment proposition.”
Retail investors in the fund will be charged a 0.7 per cent annual management charge, or a 0.55 per cent fee with a 15 per cent performance fee of gains above the FTSE All Share. Ongoing charges have not been disclosed.