SLI poised to launch absolute fund

Standard Life Investments (SLI) is to launch an absolute return fund and introduce sterling share classes on its Indian Equities, China Equities and European Smaller Companies Sicavs in the next few months.

Later in the year, the company also plans to launch unconstrained American and European funds, says Jacqueline Kerr, head of mutual funds at SLI.

According to Kerr, these developments are part of SLI’s plan to “grow and build out of [its] strength in UK equity and property”, as well as fixed income.

“We have a number of really good things planned for 2008,” she says. “In terms of development, there is a lot going on. Not just in the UK – we have strong plans to develop distribution in Europe and Asia.”

As reported in Fund Strategy on October 1, 2007, European Smaller Companies is aimed at institutional and retail investors. The portfolio, run by Ken Nicholson, invests in 40-60 high-conviction ideas, selected from a universe of 1,350 stocks. At the end of last December, the fund had €40m (£30m) in assets and a 37% weighting to industrials.

Nicholson, who has more than 10 years’ experience of investing in smaller firms, also runs four small cap mandates worth €450m.

Indian Equities, which was launched in September 2007, is run by Michael Dow, who has some 20 years’ experience in emerging markets equities. Dow runs the fund as a concentrated portfolio of 20-35 stocks.

A team of 14 equity professionals at HDFC Asset Management, Standard Life’s Mumbai-based joint venture, generates stock ideas for the fund.

The $10m (£5m) portfolio held 17% of its assets in cash at the end of December. Its largest sector weightings were to industrials, financials and energy. China Equities is run by Kai Kong Chay.

The news that SLI is planning an absolute return fund follows similar recent announcements from other firms. Premier Asset Management is to launch an absolute return portfolio for Michael Jennings. Cazenove Capital Management also plans to unveil absolute return funds for Tim Russell and Chris Rice.