River and Mercantile have launched a Ucits-compliant Icav version of its Global Recovery Fund to meet growing demand for the strategy from investors outside of the UK.
The Ireland-domiciled fund will target professional investors in Ireland, the Channel Isles and the Isle of Man and will be available with euro, sterling and US dollar unit classes.
The fund will be based on the same strategy as the existing £418.8m UK domiciled R&M Global Recovery fund launched by manager Hugh Sergeant in 2013.
River and Mercantile head of UK Wholesale Simon Smith said: “Launching an offshore version of our successful Global Recovery strategy is a natural extension to our product range.
“It gives professional investors based in the Channel Islands, the Isle of Man and Ireland the opportunity to access a specialist portfolio of value and recovery based companies managed by one of the most experienced and high regarded managers in Hugh Sergeant.”
Reflationary environment and stimulus packages to benefit recovery plays
Sergeant’s R&M Global Recovery fund invests in companies around the world which are in the recovery stage of their life cycle with a strong potential to create value. Top 10 holdings include US financials Wells Fargo, Citigroup and Bank of America, as well as Chinese tech giants Baidu and Alibaba.
The fund has returned 44.8% over the last year compared to the IA Global sector average of 27.7%, but has fallen behind peers on a five year basis, returning 95.3% versus the sector’s 97.4%.
Sergeant said now is an “exciting time” to be extending the Recovery range to a wider investor base as the global economy recovers from the Covid pandemic.
“Various factors are at play which support global growth and benefit recovery, including recovering consumer demand, entry into a reflationary phase, green government commitments, and larger fiscal and monetary stimulus packages,” he said.
River and Mercantile’s desire to tap into European markets comes hot off the heels of a slew of new product launches. Last September it launched its debut European equity fund for Schroders hire James Sym and earlier this year it announced plans to roll out an Infrastructure Equity Income fund, headed by ex-Aviva Investors man Ian Berry.
In addition to luring managers from rival fund houses it has also bolstered its UK wholesale distribution team, hiring Smith from Merian last year, as well as his colleagues Nick Pearse and Martin Canavan.
River and Mercantile reported a drop in pre-tax profits of 15% to £6.2m in its half-year results to 31 December 2020, while it saw just £0.1bn inflows in the six month period.
