Wealth manager TCAM is set to move into direct investing with the launch of a value fund later this year after finding some managers added “very little alpha” through stockpicking.
The firm, which already runs three portfolios that invest in third-party funds, expects to launch the VT Strategic Value offering in the first half of October subject to regulatory approval.
The fund will invest in UK equities that fit specific value criteria using quantitative and qualitative methods, and has an ongoing charges figure of 0.45 per cent.
In a statement, TCAM claimed the decision to launch the fund had come from an analysis of where returns are derived.
The firm also said it would reallocate UK equity exposure from its existing multi-manager portfolios into its own offering at a “significantly reduced cost”.
“Following in-depth analysis, we have found that fund returns can be largely attributed to five main styles often with managers adding, in some cases, very little alpha through stock-picking skill,” the company said.
“Therefore, we see the natural next step is to begin investing money in various styles using our own analysis in order to generate similar returns, but at much lower cost. This will mean investing in direct equities as opposed to funds and using our own research to pick stocks as opposed to paying other managers to do so.”
In October 2015 TCAM, formerly named Turcan Connell Asset Management, undertook a management buyout from law firm Turcan Connell with the backing of investors including Crispin Odey and Schroders manager Robin Parbrook.
The firm is run by joint chief executives Alex Montgomery and Haig Bathgate.