AIC reveals longest serving investment company fund managers

As Tony Blair prepares to step down as the longest serving Labour Prime Minister after 10 years, the Association of Investment Companies (AIC) has published data on the longest serving fund managers in the closed ended investment company sector.

At a time when fund manager moves are continually in the limelight, it’s interesting to see that in the investment company sector, 69% of AIC Member investment companies (ex VCTs) with 10 year records have been managed by the same fund manager for 10 years or longer. Between all the AIC Members that have been managed by the same manager for at least 10 years, they have produced an average share price total return over the last 10 years of 205%, compared to 152% for the average investment company.

There have also been some impressive double-acts in the investment company sector over the years. For example Angela Lascelles and Matthew Oakeshott have together managed Value and Income Trust, a UK Growth and Income investment trust, for the last 26 years.

Daniel Godfrey, Director General, Association of Investment Companies (AIC) said: “Of course you shouldn’t just focus on the fund manager when assessing an investment as there are never any guarantees about the future. It’s important to look at the investment objectives and other vital information too. In the case of closed ended investment companies, it’s also worth bearing in mind that, whoever manages the fund, there is always an independent Board to add that extra layer of support, scrutiny and oversight.

“But it’s still interesting to see that so many investment company fund managers have been managing the same fund for ten years or longer, showing an unusual level of dedication and stability which has served investors well.”

So what have been the key lessons learnt been? For James Henderson, who has managed Lowland Investment Company, a UK Growth & Income investment trust, for the last 17 years, it was learning to focus on stock selection, rather than market movements. James Henderson comments: “In the early days I would agonise about market levels and investment philosophy. Then I was told to just ‘get out there’ and find some shares that would go up. Ever since then I have focussed on stocks and not spent time worrying about anything else.”

Which sectors have the longest serving managers?

Interestingly, the Asia Pacific Excluding Japan investment company sector had one of the highest proportions of long-serving fund managers. Aberdeen’s Hugh Young is the longest serving fund manager in this sector for his management of Aberdeen New Dawn, which he has managed since launch. He and the company will celebrate their 18th anniversary on 12th May this year. If you had invested £1,000 at launch in Aberdeen New Dawn, you would be celebrating too as your money would have been worth £5,613 by the end of March 2007.

The UK Smaller Companies investment company sector also plays host to a high proportion of long serving fund managers. The longest serving managers in this sector, with each managing their investment companies for 17 years, are Simon Nott, Manager of Rights & Issues, Brian Watson, Manager of Framlington Innovative Growth, and 5 fund managers from Aberforth Smaller Companies who have each managed the company since launch in 1990 (Alistair Whyte, David Ross, David Warnock, Richard Newbery and John Evans).

The Global Growth sector also ranked highly, as did the UK Growth & Income sector.

VCTs

In the VCT sector, some 6 VCTs (not many of whom have been in existence for 10 years) have similarly long-serving fund managers. The longest serving fund managers are Tim Levett for his management of Northern Venture Trust VCT since October 1995 and David Thorp for his management of Baronsmead VCT since November 1995. Patrick Reeve was also amongst the longest serving VCT managers for his management of both Close Brothers VCT since April 1996, and Close Brothers Protected VCT since April 1997. Other long-serving VCT fund managers were Michael Cunningham for his management of Pennine Aim VCT and Andrew P Geoffrey Holmes, Manager, Quester VCT, with each managing their respective VCTs since April 1996.