Argonaut Capital will launch a European income fund at the turn of the year, just six months after manager Olly Russ moved to Liontrust along with a pair of similar strategies.
The Europe ex UK long-only income vehicle will be a value strategy run by Greg Bennett (pictured), who co-manages more than £500m in the European Alpha and Absolute Return funds alongside Argonaut founder Barry Norris.
Mr Bennett was previously deputy manager alongside Mr Russ before the latter’s exit to Liontrust.
The launch represents a swift change for the firm, which saw £300m leave as part of the Liontrust deal. But Mr Bennett said Argonaut had no further launch plans in 2017.
The new fund’s asset allocation will focus on “unloved” areas of the European market with a large overweight position in financials, favouring banks, but avoiding the energy sector. It will have a zero weighting to healthcare due to a “lack of yield opportunities”.
Mr Bennett said he believed there was a significant opportunity for a “genuine equity income fund”, and felt the current batch of European products were not offering an attractive yield.
“The yield on an average European ex UK equity income fund is less than the market and most of these vehicles are hiding in bond proxy-type equities,” he said.
“Our aim will be to deliver a yield well in excess of the market yield.”
The fund will charge an initial discounted management fee of 0.35 per cent for a limited period, after which the portfolio will charge 0.65 per cent.