Former Fidelity multi-asset CIO James Bateman has hit out at large asset managers with vast teams of expensive analysts and portfolio managers as he launches boutique firm New Value Investment with his father.
The former Fidelity International fund manager officially exited the £330bn firm in October after a period of gardening leave with New Value Investment becoming incorporated in mid October, according to Companies House.
Bateman (pictured) and his father, a former Fidelity president and board member, each own a 50% stake in the firm, based near Victoria station. The younger Bateman is listed as CIO of the firm.
The New Value Investment website reveals two fund launches are on the cards for mid 2020 – in equities and multi-asset – pending regulatory approval.
The senior Bateman was one of the founding members of Fidelity International, joining in 1981, a year after his son’s birth, as head of UK sales and marketing. He became president a decade later and was appointed vice-chairman in 2001.
‘Expensive analysts and even more expensive portfolio managers’
In the lead up to the fund launches, the boutique will publish at least six pieces of research putting the funds industry under the microscope.
In a statement that could apply to Fidelity, the company website says large asset managers are “characterised by sizeable teams of expensive analysts and even more expensive portfolio managers, who travel the world meeting companies in the hope of stumbling across an insight the market has missed”.
Fidelity International has over 400 investment professionals and research staff around the world.
Within equities, Bateman will be conducting research on the “extinction” of the star fund manager, the problem with indicies and the failings of “shareholder value”.
“The industry’s focus on shareholder value has driven short termist behaviour by company management that destroys the long term value of their businesses whilst actually impeding client returns,” the website said.
“There is an alternative: investing in equities needs to be reframed as ownership of businesses, not speculation on stocks, which in turn requires a fundamental shift towards a different definition of value – and indeed a different set of values – by investors.”
Multi-asset investing is not about heroism
Alongside three pieces of research on equities, the firm will also publish three pieces on multi-asset investing.
“The starting point for multi asset needs to be effective diversification, not jumping between asset classes whilst attempting to wring performance from complex, opaque and often overpriced instruments,” the website says. “Investors choose multi asset for prudence, not cavalier attempts at heroism.”
The research papers would look at the risks involved in esoteric investments, the danger of chasing momentum in asset classes and how multi-layered fees, expensive asset classes and implementation costs can erode returns.
New Value Investment to focus on ‘responsible capitalism’
The investment boutique will focus on “responsible capitalism”.
In a statement on the company’s website, Bateman said: “The companies that will succeed in the future aren’t those that squeeze their workers as much as possible, who ride roughshod over society and the environment, or who treat their customers with thinly-veiled contempt.
“Instead, the successful businesses of tomorrow will be those that understand what it is to be responsible – within their companies, outside their organisations, and in their financial prudence.”
