Unicorn rides high on small caps

Unicorn gathered pace after it severed ties with its parent company in 2000 and, despite a ropey time in 2008 when it lost some funds, it is back on track, writes Neal Underwood.

The firm has also been actively promoting the Outstanding British Companies fund. “It’s very simplistic,” says McClure. “Investors like it. It’s got lots of names investors recognise.”

Tim Cockerill, the head of research at Ashcourt Rowan, says Unicorn has retained its focus on smaller companies. “The attraction for me is they’re a boutique, and they’re a UK small companies boutique. The guys running it and managing the money have a lot of experience. I’ve known Paul Harwood almost since I joined the industry. He’s very level headed. He’s not sucked in ever by what’s going on in the market; he’s very cynical and very independent.”

Cockerill notes that the Outstanding British Companies fund in particular is riding high in terms of performance. “If you want small companies and experience that is what Unicorn can offer you. I think they’ve pulled the whole business together. You’re buying a pretty good-quality outfit and I hope things work out for them. They’re good guys and you can see that in the numbers.” While Unicorn’s funds are at present too small for Ashcourt Rowan to invest in, Cockerill says several have the potential to get onto its buy list.

Much effort has gone into getting the Oeic funds onto several platforms to reach a wider IFA client base, and the firm is also seeking an OBSR rating. “With our funds at this level, we have to look at the IFA market to grow them,” says McClure. “Support has been gathering pace quite quickly. We changed our view on this; previously the chief executive wouldn’t go on platforms as he believed margin was everything. But the move to platforms is the way forward. There are people we obviously can’t get to unless we are on a certain platform, no matter how well we perform. The first benchmark is £10m [in a fund], which brings on board small ­discretionary managers; then wealth managers start to come in. Margins are not the issue at the moment; it is distribution.”

McClure says Unicorn’s expertise definitely lies mainly in British equities, primarily in mid and small-caps, but moving slowly and steadily towards FTSE stocks. “We’re also very big in the VCT area which we will grow.”

Expansion into other areas could be on the horizon. “We’re well resourced here. We don’t subcontract to anyone else. But if a European or American equities opportunity came along we would look at that. It could be outsourced or someone who’s been made redundant from a big operation. We do have the infrastructure and with Miri Prior we have a sales presence. We have also looked at making acquisitions. We have a strong balance sheet, and if the right thing came along we would look at it very seriously.”

McClure says the Aim venture capital trust, which has assets of £65m, has the potential to get up to £100m. “On the Oeic, we really don’t know how big it could become. There’s no reason the Income fund couldn’t be £150m. I would say to investors: Unicorn is back. We’ve got performance across the board, we’ve laid out a plan and the timetable is going more or less exactly as we want. We’re pleased with the change of direction.”