Paul Mumford’s small cap funds have been absorbed by Stonehage Fleming in what has been described by one fund buyer as a “strange” tie-up with Cavendish Asset Management.
Family office Stonehage Family, which has over £45bn in assets, has snapped up Cavendish’s entire investment activities, including £1bn worth of institutional and professional client portfolios and four Oeic funds, two of which are run by Mumford (pictured).
The Cavendish International fund and Balanced Income fund, as well as Mumford’s £78m Cavendish Opportunities fund and £75m Aim fund will be rebranded under the Stonehage Fleming banner and sit alongside its existing range of collective vehicles.
Mumford will transfer to Stonehage along with three other senior members of the fund management team where they will continue to run their respective funds.
Cavendish CIO Julian Lewis will also join as part of the deal, which is expected to complete on 1 August.
Stonehage is a ‘different beast altogether’
Fairview Investing investment consultant Ben Yearsley said the deal seems a “strange fit” given Mumford’s background in small cap companies.
He rates Mumford who he has known for many years as “an excellent small cap and Aim manager” and an “old school stock picker”.
This seems out of sorts with Stonehage’s existing £11bn investment management offering, which chiefly consists of global equity and multi-asset funds, including the $1.2bn Stonehage Global Best Ideas Equity fund, managed by Gerrit Smit.
“Stonehage Fleming is a different beast altogether though with the Fleming banking dynasty behind them it’s clearly a quality outfit,” said Yearsley.
“On the flip side there is no negative overlap, which means not having to get rid of managers, change process or style,” he added.
Paul Mumford ‘never got much traction’ at Cavendish
Yearsley said Mumford “never got much traction at Cavendish” though he notes he was able to grow his funds to a “reasonable size”.
Cavendish was set up in the 1980s as a private wealth manager to look after the assets of the Lewis family.
From there the London-based business expanded to look after more institutional and professional clients, including ultra-high net worth individuals and families.
Mumford joined in 1994, bringing his Opportunities fund, which he launched at Glenfriars in 1988, with him.
The Cavendish Aim fund was among the top 10 strongest performing funds in H1 2019 though over the past year it has sunk into negative territory (-18.5%) thanks to the coronavirus sell-off. Over three and five years the fund is first quartile, returning 16.6% and 78.1% against the IA UK Smaller companies returns of -3.5% and 25%.
Mumford’s Cavendish Opportunities fund, which sits in the IA UK All Companies sector, has had a tougher time handing investors losses over one, three and five years.
