OMGI to merge away Freeman-Shor’s UK Strategic Best Ideas fund

Lee Freeman-Shor

Old Mutual Global Investors plans to merge Lee Freeman-Shor’s £32.2m Old Mutual UK Strategic Best Ideas fund into Simon Murphy’s £6m Old Mutual UK Opportunities fund.

A letter sent to unitholders says the firm believes it is in their best interests for the fund to be merged away. 

“The Old Mutual UK Opportunities fund is run by Simon Murphy, and the strategy has performed well with consistent positive performance, even during periods when the equity market returns have been negative,” the letter says.

”Old Mutual Global Investors has a long established reputation in UK equities for which the highly rated UK team has won many awards. Our proposal therefore delivers the fund to a team which is well positioned to continue to provide the quality that you expect from us.

“What the merger also means for you is that you will benefit from a lower cost. The fund will be part of a larger, more efficient fund, as it will move from a multi-manager to a single manager approach, with a significant expected decrease in the total expense ratio.”

Old Mutual UK Strategic Best Ideas and Old Mutual UK Opportunities both take a long-short approach.

The offshore Old Mutual UK Opportunities fund will be redomiciled on 2 August, then the merger will take place on 9 August.

The firm merged sister fund Skandia UK Best Ideas, which was also managed by Freeman-Shor, into Simon Murphy’s Old Mutual UK Select Equity fund earlier this year. The combined fund was then renamed Old Mutual UK Equity.

Freeman-Shor still runs the £303.8m Old Mutual Global Best Ideas fund and the £224.9m Old Mutual European Best Ideas fund. No changes are planned for the management or objectives of these funds.

Old Mutual UK Strategic Best Ideas’ cumulative performance to 30 July 2013

Fund 7.24% 9.95% 27.66% 42.83% 46.40%
5.36% 10.03% 27.01% 44.03% 53.27%
1.79% -0.07% 0.51% -0.83% -4.49%
  64 / 283 134 / 280 113 / 280 133 / 266 150 / 245
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Source: FE Analytics