Highly regarded smaller companies managers Paul Marriage and John Warren are to launch a smaller companies fund in November.
LF Tellworth UK Smaller Companies Fund will invest in UK registered and listed companies with a market capitalisation of between £50m and £2bn. Mr Marriage and Mr Warren will look to hold between 40 and 60 stocks and aim to beat the Numis Smaller Companies including Aim excluding investment trusts index. The managers will select stocks according to their individual merits, assessing their growth potential and value.
LF Tellworth UK Smaller Companies, which will be structured as a UK-domiciled open-ended investment company, will be run via the same strategy as Mr Marriage and Mr Warren's former fund at Cazenove Capital and then at Schroders. Mr Marriage managed Schroder UK Dynamic Smaller Companies (GB0007220360) between 2006 and 2017, and was joined by Mr Warren in 2010. During their tenure the fund returned 435 per cent compared with 114 per cent for the FTSE Small Cap index. During the period that Mr Marriage ran the fund it was the third-best performer in the Investment Association (IA) UK Smaller Companies sector.
The managers left Schroders last year to start their own investment boutique, Tellworth Investments, but continue to run Schroder UK Dynamic Absolute Return Fund (GB00B3N53472). However, Schroder UK Dynamic Smaller Companies is now run by Iain Staples and Luke Biermann.
Darius McDermott, managing director at Chelsea Financial Services, said Tellworth’s new fund may interest investors with a higher risk tolerance who want a truly actively managed smaller companies fund. "The two managers left a very successful UK smaller companies fund at Schroders when they left," added Mr McDermott. "It had a very good track record and was near capacity. So it was likely they would launch a new, similar product. It's not cheap, though – the institutional share class has a management fee of 1 per cent, which isn't that competitive in today's market.”
Tellworth Investments was set up together with BennBridge, an investment firm that partners with specialist fund managers to set up asset management companies. BennBridge aims to provide these firms with the same infrastructure and distribution support offered by larger institutions. BennBridge is a 100 per cent owned subsidiary of Bennelong Funds Management Group, an Australian based multi-boutique firm established in 2006, which manages assets worth £6bn.
