Liontrust will have two funds competing directly with each other in the same sector after it completes the acquisition of rival fund house Neptune.
Liontrust’s acquisition of Neptune was confirmed at the end of July, subject to regulatory approval.
But there is a crossover between the products offered by the rival firms.
In UK equity income Neptune founder Robin Geffen is running the £278m Neptune Income fund, which is ranked first in the IA UK Equity Income sector over the past year to August 8 and second in the FE version of that sector.
Liontrust runs the £100m Macro Equity Income fund in the same sector.
Data from FE Analytics shows this fund has lost 3 per cent over the past year while Mr Geffen's fund returned 3 per cent against a sector average loss of 5 per cent.
Liontrust’s view is that the funds are managed very differently and will be managed by different teams within the combined business.
Jason Hollands, head of communications at wealth manager Tilney, said while it was unusual for a fund business to operate with competing funds in the same sector, in Liontrust’s case it could make sense.
He said: “Liontrust have a very distinctive business model. It is almost like a series of boutique firms, where each individual team operates quite separately, with Liontrust providing the distribution and other services.
"So while there could be fund mergers in time as a result of Liontrust buying Neptune they can also run funds separately.”
Liontrust paid £40m for Neptune, with the latter’s fund management team all transferring over to the firm.
The acquisition is presently going through the regulatory approval process.
Liontrust’s most recent set of results showed it had assets under management of £12.7bn at the end of March 2019.
The most recent set of accounts for Neptune, which cover the period to the end of 2017 and were filed in October 2018, show assets fell to £3.6bn, having been £3.7bn the previous year.
The firm made a profit of £994,000, having lost £62,000 in the previous year.
david.thorpe@ft.com
