Hiscox subsidiary on brink of completing buyout

Hiscox Investment Management (HIM), the investment management subsidiary of Hiscox, an insurance company, is to conduct a management buyout (MBO) to be completed on December 31.

The new company will be called HIM Capital and it will have an initial retail offering of three funds.

At present HIM manages five funds on behalf of Hiscox: European Financial, Far Eastern Financial, Global Financials. Hiscox Insurance Portfolio and US Financial.

Following the MBO the Global Financials fund will be merged into European Financial and the US fund will be closed on December 21.

Alec Foster manager of the Hiscox Insurance Portfolio, will become chairman of HIM Capital, while Marc Stacpoole will become managing director. While the new management will hold 60% of HIM Capital, Hiscox will retain a 40% shareholding. Gross assets after completion are expected to be £2m.

Stacpoole says: “HIM Capital will be a dedicated manager of financial funds. All three funds will be concentrated portfolios of 30-35 stocks.

“We decided to close US Financial because the manager, David Astor, has not come across as part of the MBO. He is staying at Hiscox to manage the investment assets of the group. The fund is also very small at $9m (£4.4m).”

As part of the fund reorganisation the Far Eastern Financial fund will be moved from its Cayman-Islands domicile into a Dublin-based Oeic.

At launch the three HIM Capital funds will have about £125m of assets under management, with Hiscox retaining its holdings in the Far Eastern and European funds.