Fundsmith shifts £2.3bn into Sicav for Brexit

Terry Smith has been a public supporter of the UK’s exit from the EU

Smith

Fundsmith has shifted €2.6bn (£2.3bn) worth of client assets into a Luxembourg Sicav as part of its Brexit contingency planning.

A feeder fund previously used by European clients who did not want to access the Fundsmith Equity Oeic directly was transferred into the Sicav at the end of March with assets transferring during the month of April.

Fundsmith Equity manager Terry Smith has been a public supporter of Brexit stating ahead of the referendum in 2016 that he thought arguments for remaining had been part of “campaign fear”.

The articles of the feeder fund were amended on 22 March and the name was changed a week later on 29 March 2019 when the UK was initially meant to leave the EU. That deadline has now been extended to 31 October as parliament refused to vote in favour of Theresa May’s withdrawal agreement.

Fundsmith confirmed to Portfolio Adviser that €2.6bn had been shifted at the end of March. The Sicav factsheet showed its total assets at the end of April were €2.9bn (£2.6bn).

Fundsmith currently has no immediate plans to launch a Sicav version of its other Oeic, the £235.4m Sustainable Equity fund.

Morningstar highlighted the move in its monthly flows figures for UK-domiciled funds noting the Fundsmith Oeic had shrunk in size to £17bn due to the shift of assets during the month.

Fundsmith follows in the footsteps of fellow equities boutique Crux Asset Management, which also transitioned a feeder fund into a Sicav for European clients. Crux worked on the assumption that after Brexit the UK would become a non-EU Alternative Investment Fund (AIF).

A feeder fund must invest the majority of its assets into a Ucits vehicle in order to maintain its own Ucits status.

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