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Investec brings £300m American fund in-house for Mundy

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Investec brings £300m American fund in-house for Mundy

Investec Asset Management is bringing its £300 million American fund in-house so managers Alastair Mundy and Mark Wynne-Jones can improve its performance.

The sterling-denominated fund, which has been managed for 10 years by Thornburg Asset Management on a sub-advisory basis, will be run by Mundy (pictured) and Wynne-Jones from 20 August.

Over the last decade the fund has had a value tilt and a portfolio of around 40 large cap stocks.

David Aird, managing director of the firm’s UK client group, said this value bias means Mundy’s contrarian team is ‘ideal’ for taking on the fund’s management.

‘We outsourced our American fund in 2002, so we have a long relationship with them [Thornburg],’ said Aird. ‘But of late, performance has not been up to scratch.

‘This is something we haven’t rushed into. We’ve spent a while reviewing the long-term future for this fund. We have decided the ideal team to take this on is Mundy’s contrarian team.’

Mundy and Wynne-Jones will work with their team of 10 investment analysts to run the American fund in their value style where they screen and highlight stocks that are out of favour but have a good chance of share price recovery.

In taking over the fund, Aird said its investment objective will remain the same while the risk profile of the fund is also expected to remain in place.

Mundy and Wynne-Jones’s team runs more than £4 billion in assets, helping to manage Investec’s £2 billion Cautious Managed fund, as well as the firm’s UK Special Situations and Global Special Situations funds.

Aird said Mundy and his team have been making allocations to US equities for several years, within their global equity funds and on US equity strategies in segregated mandates for institutional clients.

He said their US assets have outperformed the S&P 500 by almost 16% since December 2007.

In contrast, the American fund under Thornburg has delivered a negative return every year for the last five years, down as much as -15.8% over the last year in sterling terms.

Aird added: ‘With the S&P 500 being very difficult to beat, being a contrarian investor puts him [Mundy] in a good place to beat that benchmark.’

The Citywire Selection Investec Cautious Managed fund has returned 34.15% over three years to the end of June, versus the LCI FTSE 350 benchmark, which returned 34.05% in this time.

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Alastair Mundy
Alastair Mundy
135/190 in Equity - Global Equities (Performance over 3 years) Average Total Return: 42.33%
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74/128 in Equity - North America (Performance over 1 year) Average Total Return: 16.39%
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