River and Mercantile Asset Management LLP (River and Mercantile) has renamed Hugh Sergeant’s UK Equity Long Term Recovery Fund as the strategy celebrates its 10th anniversary.
The £274m fund, which launched on 17 July 2008, has been renamed the River and Mercantile UK Recovery Fund to align it more closely with the firm’s other offerings, which include the UK Income and UK High Alpha funds.
The UK Recovery Fund invests in companies that have a strong underlying business franchise whose profits – and therefore share prices – are depressed but are showing clear signs of recovering to a more normal level. The profits of a Recovery share are usually depressed due to either economic or sector dislocation or poor management decisions, or a combination of both. The catalysts for recovery are most often either self-help (often encouraged by new management) or economic and sector stabilisation, or both combined.
Sergeant focuses on companies that have the potential to double their share prices in the next three to five years, with clear catalysts in play to deliver such growth.
The manager uses his PVT (Potential, Valuation, Timing) investment process to select companies for the 200+ stock portfolio, which focuses on buying companies with the best potential to deliver returns, at attractive valuations, and at the right time.
Since launching a decade ago, Sergeant’s strategy has returned an impressive 283.4% before fees, compared with the 124.2% returned by its benchmark, the FTSE All Share, over the same period, according to FE Analytics.1
As part of the anniversary, River and Mercantile has also changed the name of its World Recovery Fund (which has returned 99.4% after fees over the five years to 30 June 2018), to the River and Mercantile Global Recovery Fund.
Hugh Sergeant, partner and CIO of equities at River and Mercantile Asset Management, said: “Having launched the fund at a time of immense stress in global markets, we are delighted to have achieved what we have after a decade of managing the fund, and we look forward to the next 10 years with the same focus on investing for the long-term.”
Mark Thomas, Managing Director – Wholesale at River and Mercantile Asset Management, said: “Under Hugh’s leadership the UK Recovery Fund has excelled over the past decade, delivering significant outperformance for investors, and this rename brings the strategy – and its sister Global Recovery Fund – in line with our other products.”