My Yahoo!In the hedge-fund world and the U.S. mutual fund business, star managers like Peter Lynch, George Soros and Julian Robertson became household names on the heels of their impressive investment performances.
The growth of the business in Europe has given birth to a new species of star:the in-house hedge-fund manager. A small crop of managers with both the record and the talent are emerging as stars in their own right.
Gartmore's Roger Guy is one of them. For the past eight years, Guy has managed money in continental European stocks for Gartmore and has made a name for both his firm and himself. A $10,000 investment in 1995 in his offshore Gartmore Capital Strategy Continental Europe fund—a Jersey-registered mutual fund—would now be worth $27,651. The same investment in the average European equity fund tracked by S&P Fund Services would have grown to just $20,718. Guy's fund ranks in the top quartile of European equity funds tracked by Standard & Poor's for three-, five- and ten-year periods. The fund has also appeared on FORBES GLOBAL's lists of top offshore funds on several occasions.
Along the way, Guy has drawn plenty of attention from investors. His flagship offshore fund, with just over $2 billion in assets today, had only $178 million in 1997. A similar fund for U.K. investors that he manages grew from $466 million to $2.8 billion.
Two years ago a big U.S. bank asked Guy if he would consider running a hedge fund, in addition to his traditional funds. Guy agreed and set one up for the bank. In November 1999 Gartmore decided to offer another hedge fund, christened AlphaGen Capella, to outside investors. It raised $500 million in three months, then shut its doors to new investors.
For those who got in early, it's been a wonderful ride. Capella has nearly doubled in value since its launch; European markets have been flat in the same period. It hasn't had a single down month and has been less volatile than an index fund. Over the same period, Guy's traditional funds are up just 11%.
As a hedge fund, Capella has the ability to short stocks and can also use leverage, normally a modest 20% of the fund's capital. It's also a lot more concentrated than Guy's other funds: it holds 35 to 50 stocks (the traditional funds hold 80 to 100).
Unlike investors who favor a buy-and-hold approach, Guy actively fine-tunes his portfolios. Half of his fund's stocks are long-term core holdings. The other half consists of such shorter-term ideas as restructuring plays and cyclical bets. "For a lot of people, turnover is a dirty word," Guy says. "But if you're good at trading, it can really add value to the fund."
Guy's Gartmore Capital Strategy Continental Europe fund charges total expenses of 1.59% annually, less than the 1.86% average for the 558 offshore European equity funds tracked by Fitzrovia International.
To find out where Guy thinks he can add value these days, FORBES GLOBAL stopped by Gartmore's London offices. Guy, an easy-going 34-year old, gave us precisely 30 minutes of his time over a cup of tea.
 |
||
| 1 of 3
| Next > | |
Subscriptions >
| Free Trial Issue of Forbes | Forbes Gift Subscription | ||
| Subscribe To Newsletters | Subscriber Customer Service | ||
| Buy Audio Version of Forbes |
| Trading Center |
|
|||||||||
| CEO Book Club | more > |
The Philosopher Kings Of HedgingSteven Drobny reveals insights from the hedge fund all-stars. |
||
Laissez Faire In The StudioAt Columbia Records, John Hammond made some of the greatest discoveries in American music. |
||
| Advanced Search | New & Notable | ||
|
|
|
