Cazenove multi-manager team returns to small caps

Robin McDonald Cazenove 2010 480

Cazenove’s multi-manager team has made its first investment in a small cap fund  in more than six years owing to attractive valuations in the space.

Marcus Brookes, Robin McDonald and Joe Le Jehan have bought Paul Spencer and Richard Bullas’ £22m Franklin UK Smaller Companies fund for their £138.7m Cazenove Multi Manager UK Growth, £48.4m Diversity Tactical and £21.5m Diversity Balanced funds.

Le Jehan says: “What we have done is take a bit away from Franklin UK Mid Cap and gone down the cap scale with the same managers. We love how they run money in a bottom-up way with a view to what is going on in the macro.

“You look at how well the mid-cap index has done and it is starting to look more fully valued. The opportunity set in the mid-cap space is looking pretty stretched so we want to give the managers a bit more freedom in the small-cap space.”

The Franklin UK Smaller Companies fund has industrial goods and services as its largest sector weighting, accounting for 33.6 per cent. Xaar, which manufactures industrial inkjet printheads, is the biggest individual holding at 5.2 per cent.

Skerritt Consultants head of investments Andrew Merricks says: “If you believe we are heading towards some sort of recovery then we have seen time and time again that small caps outperform and it is as good a time as any to start adding exposure if you do not have any.”