Crux Asset Management has unveiled a ‘patient’ special situations fund for recent hire Richard Penny that is focused on unloved mid and small cap companies.
The FP Crux UK Special Situations fund will target long-term capital growth from a high conviction, concentrated portfolio of UK stocks, with some exposure to other developed markets. It will seek to invest in mid and small cap stocks where Penny perceives there to be “hidden value”.
Penny (pictured) previously ran a UK special situations mandate for his former employer Legal & General Investment Management which he left in January after 15 years at the firm.
The L&G UK Special Situations Trust, which he took over in 2014, is first quartile over three years and second quartile over five years. Recently it has lagged peers in the sector delivering 0.6% against the IA UK All Companies’ 4.6%.
Penny also managed the £156m L&G UK Alpha Trust as well as a number of segregated mandates.
Patient fund
Crux AM said ‘patience’ will be a core component of the fund’s approach. It said Penny will not invest in stocks which are “unproven” or in cases where he deems it too early to invest.
The former LGIM manager is also expected to put a substantial amount of his own money in the fund to ensure alignment with investors, the asset manager said.
Commenting on his first Crux vehicle, Penny said now is the right time to launch a UK-focused product as the region remains out of favour and shunned by investors.
He said: “I have invested in UK stocks for many years and have always believed that good businesses only make the right investments when they are bought at the right price. Now is the ideal time to be bringing this new offering to investors as the UK remains out of favour and the uncertain environment creates numerous attractive opportunities for experienced stock-pickers. It is very exciting to be joining such a talented team and to be a part of this growing business.”
The FP Crux UK Special Situations fund will be available in both income and accumulation share classes. The income share class has an ongoing charges figure of 0.93%.
