Cato Stonex to launch global income fund for GAM

Independent fund management firm THS Partners (THS) is planning to launch a global equity income fund in conjunction with GAM next year, Wealth Manager understands.

Cato Stonex, one of the firm’s founders and fund managers, said THS would run the fund while GAM would distribute it, although the two firms are still in discussions over the launch.

The fund, which would be the second run by THS for GAM, is being considered following the end of an exclusivity agreement between THS and St James’s Place (SJP).

Under this agreement, THS ran large mandates for SJP but could not launch funds with other firms for high net worth, discretionary or retail clients.

Stonex said: ‘If you can buy solid blue chip companies with a yield of around 6%, compared with government bonds which are yielding so little, then this type of fund is a useful product. We can do this easily as it overlaps with our portfolio. So we are not picking many new stocks, but we avoid those with low yields.’

He said the managers take an unconstrained approach and look for companies that are exposed to growing parts of the economy, have a unique selling point that is hard to replicate, and have a balance sheet that is strong enough to weather a tough period of economic turbulence.

Some of the sectors they like include luxury goods firms, telecoms and mobile data.

SJP last year launched a global equity fund, to diversify assets away from THS and dilute manager concentration risk. This ended the exclusive relationship between SJP and THS in the process. 

Stonex is one of the most recognised names in fund management. After graduating in 1986 from the London School of Economics, he joined Morgan Grenfell where he became assistant director of the firm's European government bond trading division. Three years later he joined Rothschilds, where he met the late Nils Taube and John Hodson and went on to co-found THS.