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30 September 2020
By Maynard Paton
I am not a great fan of the fund-management industry.
I cannot think of another sector where the employees collect enormous salaries while the customers pay hefty fees and sometimes get nothing in return.
Quite often us amateur investors are better off with simple index trackers rather than falling for the industry’s persuasive advisers and glossy brochures.
Yet here I am about to study Polar Capital — a fund manager that might actually exhibit ‘pandemic proof’ qualities given its investment bias towards technology and healthcare.
Read my full Polar Capital article for SharePad.
Maynard Paton
Maynard,
I am a sharepad user and much enjoyed your article on Polar, of which I am a shareholder. By way of background I used to work at a US investment bank for many years and now do some consulting for a wealth manager and increasingly do some direct UK investing.
I just wanted to mention a couple of things on your Polar article; I know the company well with some good contacts there. I completely concur with your analysis of the financials. The real opportunity in the intermediate term comes I think from a couple of new teams. The new EM team, which came from Nordea, has a terrific reputation and it seems their performance has been outstanding. I have seen their detailed presentation and it seems they have a very robust method. The second team is a global team from First Pacific; I don’t know them at all but I know that there is a lot of excitement about their potential too. On the marketing side there is a big effort in the US, again with new hires I believe.
So while I think the tech team is unlikely to see a lot of new assets coming in due to capacity constraints and will be somewhat dependent on the tech market and performance, there is I think real opportunity to bring AUM significantly from these 2 franchises
Many thanks
Miles
Hi Miles,
Thanks for the comment. Good points on FuM capacity and useful insights into the new teams. I did look at capacity for POLR but forgot to mention it within the article. Capacity is something I pay greater attention to given my holding in City of London Investment has essentially warned of capacity constraints.
This chart shows the capacity potential for POLR’s different themes as at April 2020:
Tech still has some way to go capacity-wise, and I think those assets will mostly dictate the group’s performance for a while. I am not familiar with the new teams, but they sound promising, and if the client money rolls in the wider FuM base could diversify and perhaps become less volatile. EM Stars in particular seems to have plenty of spare capacity to flourish.
Thanks once again,
Maynard