Terry Smith in­vests £115m in his Fund­smith fund

The Daily Telegraph - Your Money - - YOUR MONEY - Sam Brod­beck

Feted fund man­ager Terry Smith has made a new £115m in­vest­ment of his own money into the £8.2bn Fund­smith Eq­uity Fund, the “opened ended” fund he founded six years ago.

The cash in­jec­tion – made from the sale of his stake in the bro­ker Tul­lett Pre­bon, which he used to run – means Mr Smith now has £200m in Fund­smith funds.

His com­pany also man­ages an in­vest­ment trust, Fund­smith Emerg­ing Eq­ui­ties Trust or “FEET”.

Tra­di­tion­ally, man­agers of “ope­nended” funds have been more cagey than their coun­ter­parts who run in­vest­ment trusts about dis­clos­ing the ex­tent of their per­sonal in­vest­ments in the port­fo­lios they man­age.

In our Fund of the Week col­umn (on Page 13 this week), Tele­graph Money rou­tinely asks man­agers whether they in­vest their own money in the funds they man­age. Many con­firm that they do, but they tend to be reluc­tant to state a spe­cific fig­ure.

Mr Smith said: “I find it as­ton­ish­ing that many fund man­agers do not have skin in the game in terms of a sig­nif­i­cant in­vest­ment in the funds they run. I wouldn’t trust a fund man­ager who doesn’t, and I be­lieve dis­clo­sure of this should be manda­tory, as it is in the US.”

Canac­cord Ge­nu­ity, the stock­bro­ker, tracks the per­sonal in­vest­ments made by boards and man­agers in the “closed-ended” in­vest­ment trusts they run. There is no equiv­a­lent overview of open-ended fund man­agers’ hold­ings.

The most re­cent Canac­cord re­port found that Lord Roth­schild had £155m in­vested with RIT Cap­i­tal Part­ners, the in­vest­ment trust he chairs, and Christo­pher Mills, chief ex­ec­u­tive of North At­lantic Smallers, had £65m in the com­pany.

The re­port crit­i­cised the “lack of con­vic­tion” by man­agers who do not per­son­ally in­vest.

How­ever, Ja­son Hollands of Bestin­vest, the fund shop, said ope­nended man­agers should not be judged on the same terms as trusts. He said trusts’ stock mar­ket list­ing made it es­sen­tial that man­age­ments’ stakes were dis­closed.

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