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BlackRock UK Focus fund quadruples its assets in a day
by Robert St George on Oct 28, 2013 at 10:38
The BlackRock UK Focus fund has swelled from less than £50 million of assets under management to nearly £200 million in just one day.
Despite this, BlackRock confirmed a single institutional investor allocated almost £145 million to the fund at the end of September. In a separate move, Chappell also won a mandate worth around £250 million on the St James’s Place UK & General Progressive fund last month.
Chappell told Wealth Manager that managing the flow into the UK Focus fund would not be a problem, despite it being highly concentrated, with just 21 positions.
‘We have been managing UK Focus strategies for 10 years now and currently have approximately £2.5 billion under management,’ he explained. ‘We launched the BlackRock UK Focus fund two years ago to take our knowledge of managing these types of high-conviction mandates for institutional investors to the retail market. Therefore, we have long experience in managing capacity as part of investment process and are confident we will be able to deploy new inflows efficiently.’
Gary Potter, co-head of F&C’s multi-manager team and who seeded the UK Focus fund with £35 million, also tipped Chappell to turn around his performance. ‘He is a very capable long-term fund manager,’ Potter said. ‘We have always been prepared to back what we like.’
Potter acknowledged that the fund’s results had yet to impress, but accepted such short-term issues as a consequence of Chappell’s style. ‘He had a couple of stocks that didn’t do very well at all,’ observed Potter. Notable problem positions have been BG Group and Standard Chartered, together accounting for 16% of the portfolio, although the largest holding – Next at 8.9% – has surged over the past year.
‘In any focused portfolio, when one or two holdings don’t fulfil the manager’s ambitions it’s always going to have a disproportionate impact,’ said Potter. ‘So if you were buying just one fund, would this one be appropriate? Maybe not.’ However, he commended it as part of a balanced portfolio given the ‘potent’ opportunity for significant growth from its portfolio.
‘With this type of manager, we have to be patient,’ Potter added.
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on Dec 06, 2013 at 14:28