Henderson New Star has revealed details of the new offering it plans to launch on October 1 for Richard Pease.
European Special Situations will be a more concentrated, mid-cap focused version of the existing European Growth fund, which has £593m under management.
Special Situations will have 30-50 stocks compared with European Growth’s 40-80. It will have two-thirds in small- and mid-cap and the rest in large-cap stocks.
The new vehicle also differs from the existing in fund in that it has an income share class, which the group estimates will yield between 3% and 3.5% annually.
Laurie Jacques, the head of UK retail sales, says the new fund will be ‘punchier’ than European Growth.
“It will have a punchier top 10 with bets of about 6% in each holding, and fewer overall stocks. Initially there will be some crossover of stock ideas,” says Jacques.
Pease will look for recovery stories and undervalued stocks, with holdings at launch likely to include Neopost, a mailing systems supplier in a sector with barriers to entry, and Wolters Kluwer, a business publisher whose chief executive has driven its increasing market share.
The group will cap the fund when it reaches £500m. “Our experience of Richard is that he is capable of [raising those assets]. Over a meaningful period we would hope to get to that level,” Jacques says.
European Special Situations is the first product launch from Henderson since it took over New Star in April.