Nick Roe-Ely is to leave JO Hambro Capital Management (JOHCM) after the investment boutique opted to close his struggling US mid-cap fund on the back of an increasingly gloomy outlook for the US economy.
Roe-Ely joined Johcm in October 2005 from Tilney. The move was somewhat controversial given he had committed his future to the Liverpool-based wealth manager earlier in the year.
He launched the JOHCM American Growth fund in October 2005. However, a fundamental shift against his growth investment style in value driven US markets sent his performance tumbling. According to Lipper the fund lost 15.3% in 2006 against an average loss of 1.3% in the peer group.
He enjoyed a return to form in 2007, returning almost double the peer group average. But the growing credit crisis in markets since the turn of the year has seen his aggressive style suffer a loss of around 14.4% up to 25 March versus an average loss of 7.8% in the peer group.
But Roe-Ely remained confident his investment style was on the verge of something special. In a recent interview with Citywire Roe-Ely said the current environment for growth was looking at its most attractive level in the last 30 years.
But this was not enough to convince JOHCM to proceed with the fund.
The firm's marketing director Sven Kuhlbort, said the decision was no reflection on Roe-Ely’s talent. He said: ‘Nick’s style is very specific in its focus on mid-cap growth and demand for this type of product among IFAs has fallen primarily due to sub-prime problems and dollar weakness.’
‘Demand has also switched for funds with more of a large cap focus and over medium term we believe mid-cap growth is going to continue to struggle.’
Johcm will now focus on its US efforts on Gordon Elvey’s JOHCM US Opportunities Fund, an all-cap fund which Kuhlbrodt described as ‘nimbler’ in style than Roe-Ely's fund.
Investors in the American Growth fund, which runs £13 million in assets, have the option to switch into Elvey’s fund or have their cash returned to them.