South African asset manager Investec has made its debut in the 40 Act mutual fund market with the launch of the Investec Global Franchise fund.
The fund is managed by Citywire + rated Clyde Rossouw, co-head of quality at Investec, who has a high conviction approach, holding between 25 and 40 stocks and targets an active share of 92%.
The fund, which was launched in December 2017 and has roughly $25 million in assets so far, has an annual management fee of 80 basis points.
Rossouw already runs the fund's underlying strategy via the $3.7 billion Luxembourg-domiciled Ucits offering, the Investec GSF Global Franchise fund, which launched in 2009.
That fund is ranked 458 out of 2,582 Global Equity funds tracked by Citywire for three-year total returns to the end of November 2017. Over that time it returned 28.6% compared to the average Global Equity fund, which was up 18.1%.
The strategy invests in companies which the manager believes create competitive advantages and strong global brands. It aims to invest in at least three countries including the US and allocate at least 40% of its assets to companies outside of the US.
The fund is currently available on BNY Mellon's Pershing platform and Investec is in talks with other major wealth platforms like Charles Schwab and TD Ameritrade about offering the strategy.
Investec, which had assets under management of $132 billion at the end of September 2017, has long had a presence in the US offshore market, but this is its first fund for domestic investors.
Founded in South Africa, the firm is now headquartered in London and around 65% of its assets are managed outside of that country, across the UK, EU, South America and the US offshore market.
Richard Garland, managing director, global advisor at Investec, said the fact that a number of wirehouses and broker-dealers were reviewing their platform line-up could benefit the company.
‘There’s a lot of change going on in the market with the DOL [rule] so gatekeepers have been rationalizing the number of fund groups they work with,' he said. 'Getting on those platforms would be a fantastic opportunity.
‘We’re in a position where we’re very well known by large firms and as they revisit the number of groups they work with, we can benefit from that.’
Garland said that he would like to see the fund get up to at least $200 to $300 million in assets before the firm started thinking about rolling out other 40 Act funds.
He added that the firm was also in talks with some of its larger wealth clients about offering separately managed accounts based on existing offshore strategies.