Edmond de Rothschild Asset Management has launched a UK Equity fund tapping into merger and acquisition opportunities.
The Edmond de Rothschild Fund UK Synergy is a Luxembourg-domiciled Ucits fund aiming to benefit from companies that are potential bid targets or are being restructured, with a universe of around 600 stocks.
Managed by Philippe Lecoq and Olivier Huet, who are part of a nine-strong team, the fund uses the same investment process as their €1.4bn (£1.12bn) Edmond de Rothschild Fund Europe Synergy strategy. The managers believe M&A activity is strong with UK stocks now looking attractive after several years of underperformance.
Lecoq says: “Our existing Edmond de Rothschild Fund Europe Synergy strategy currently holds some 30 per cent of its assets in the UK. In the lead up to the EU referendum in June we believe that M&A activity will be slightly constrained but for the mid-term, we are expecting a flurry of M&A activity post the referendum vote when uncertainty recedes.
“Corporate activity will remain strong this year and into 2017 as this kind of cycle tends to last between three and four years. The combination of weak growth outlook and low inflation is a big incentive for corporates to transform their portfolio of assets and/or to consolidate some of their activities.”
The fund launched on 6 April and has an annual management charge of either 0.7 per cent or 0.55 per cent with a performance fee of 15 per cent of gains above the FTSE All Share.