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BlackRock to soft close AAA-rated Hibbert's European Dynamic fund

BlackRock to soft close AAA-rated Hibbert's European Dynamic fund

Citywire AAA-rated Alister Hibbert's £1.96 billion BlackRock European Dynamic fund will soft close in two month's time, according to a letter seen by our sister publication Citywire Global.  

To facilitate the move A and D shares classes will be closed and replaced by new unit classes labelled FA and FD. Intermediaries subsequently investing in the FA and FD class will pay a 1% initial charge, while direct investors buying the FD share class will pay up to a 5% charge, which will be paid directly into the funds.

The group said once the strategy reached a £2.5 billion capacity limit, it too would be closed to further subscription, effectively giving Hibbert's strategy a capacity limit of £4.5 billion, which includes his Luxembourg Sicav mirrors.

The fund, a Citywire Selection star pick, has been one of the shining lights of the turbulent European market, resulting in investors flooding to the strategy. Jonathan Miller, Citywire Head of Research, had this to say on the move.

‘We have closely followed Alister Hibbert’s track record which has included time at Invesco and SWIP and the fund is a star pick in Citywire Selection. He is among the most consistent managers in the sector over more than ten years. Performance over three and five years has also been strong. We will keep investors informed in the coming weeks about its inclusion in Citywire Selection.’

According to Lipper, in the three years to the 3 September the fund has returned 47.8%, well ahead of the 29.2% gain in the MSCI Europe ex UK TR GBP. It's maximum drawdown of 23.92% was in the middle of its 100-strong peer group with a three-year track record.  

The closure is one of a number of fund closures on the European equity desk as BlackRock attempts to keep a tight rein on capacity.

A-rated Vincent Devlin and Stefan Gries' UK-domiciled BlackRock European Absolute Alpha, which was launched for the pair just over a year ago, will have its capacity limit set at £100 million at which point it will be closed to investors.

Currently it has assets of £56 million, giving the strategy a total capacity limit of around £1.5 billion.

The only exception for Devlin and Hibbert's UK funds will be those invested in the BlackRock Regular Savings Plan, who will be able to continue to make investments at current levels into the BlackRock European Alpha and BlackRock European Dynamic funds.

This fund has also delivered impressive performance over the last three years, returning 18% versus a 9% rise in its benchmark with its drawdown of 3.8% among the best in the peer group.

Meanwhile the firm also said it plans hard to close two top performing European equity funds run by Hibbert and Devlin next month. 

The group said Hibbert's €1.93 billion BGF Continental Europe Flexible fund would be 'closed to further subscriptions from new and existing shareholders' from 7 November.

This is while the €1.59 billion BSF European Absolute Return A2 EUR fund run by Devlin and Gries would also close to new and existing investors from that date.

Hibbert's BGF Continental European fund is second in the 77-strong Citywire European equities sector over three years returning 48.7%. This compares to its benchmark, which rose 27%,

Meanwhile, over three years, Devlin's BlackRock European Alpha fund has returned 19.6% compared to the STOXX Europe 50 benchmark, which rose 14.8% over the same time period.

Commenting on the closures, BlackRock's head of UK retail Tony Stenning said: 'We work closely and continuously with our risk and portfolio management teams across BlackRock to ensure our funds are being optimally managed and have taken the decision to introduce these changes to protect the interests of our existing investors by ensuring the funds can continue to be managed in accordance with their investment mandates.'

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Stefan Gries
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59/72 in Alternative UCITS - Long/Short Equity (Performance over 3 years) Average Total Return: -0.20%
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