Asset management firm GAM has launched a UK equity income fund, which will be managed by Adrian Gosden, who recently joined the company as investment director.
GAM said the launch has been driven by a desire to strengthen its offering to UK advisers and wealth managers.
The new fund is the company’s first UK equity income vehicle, adding to its £173m long-only onshore UK equity fund run by Andrew Green. GAM is looking to build an income franchise, and understandably so. The IA UK Equity Income sector has seen substantial growth, fuelled by lower yields in the fixed income market and a desire for growth and income products owing to pension freedoms.
Negative sentiment for UK equities generally has dampened retail demand for UK equity income funds – with net redemptions of £458m in the past 12 months. Previous years have seen the industry swell, however.
Mr Gosden comes with the right history. His 13-year tenure at Artemis saw him help build up strong performance with assets under management following. By the time he left Artemis, he had helped increase income strategy assets to well over £10bn, most of which were in the £6.4bn Income fund he ran with Adrian Frost.
The GAM fund will be onshore and the firm said it will use fundamental analysis to identify UK companies with sustainable dividends. It will aim to provide both income and capital appreciation using a multi-cap strategy.
Mr Gosden will manage the fund alongside Chris Morrison, who joined GAM in 2011 and manages UK Equities and the UK Diversified Value strategy.
Provider view
Adrian Gosden said: “This is a core fund with the flexibility to invest across the UK equity universe.
“Despite good progress in the market, we are still finding interesting income opportunities – some fuelled by management actions and others in less popular industry sectors such as financials and industrials.
“The fund uses tried and tested techniques to invest in about50 companies of varied sizes, creating diversity of sector and market cap.”
Douglas Branson, head of UK distribution, said the recruitment of Adrian Gosden “underscores the strength of GAM’s brand.”
Adviser view
Patrick Connolly, head of communications at Chase De Vere, said: “Fund manager Adrian Gosden is well known and well respected. However, his track record to date is based around a partnership with Adrian Frost on the Artemis Income fund. Now we will see whether he can produce strong results as the lead manager.”
Charges
Annual management fee of 0.75 per cent with an estimated on-going charge figure of 0.88 per cent.
Verdict
The UK equity income industry is awash with good and sizeable funds, so GAM must be prepared to play along game to build up scale.The space is competitive, with household names as rivals. The pressure is on Mr Gosden, without the assistance of more experienced partners.But he has helped build up funds in the past.
