The three-strong team behind the T Bailey Growth Fund may seem small. But as co-manager Jason Britton tells Investment Adviser, that makes it very effective. The £163m fund has been top quartile over one, three and five years since 1999. “One of the real benefits of our boutique approach is that if we have an idea, we can move very quickly.”
That may explain why the fund of funds is biased towards fund houses like itself. Fellow co-manager Richard Martin tells Fund Strategy: “Smaller groups are free from all the constraints of a big group. You avoid all the encumbrance and distraction… you get a lot of sweat for your money as an investor. Also you tend to get good, experienced managers who are breaking out of the mould.” One such fund group is Prusik. The group’s three staff run just one fund, the Prusik Asian fund, from an office above a shop. It’s returned about 32% in the past year. Saracen Growth, in which T Bailey Growth has almost 6% of its assets, is another boutique. Investing in UK equities, it is up 166.3% in five years.
The T Bailey fund owes much of its success to an independent approach to asset-picking. Rather than use the MSCI World stockmarket index, which is skewed towards developed markets, the team uses GDP to work out how the fund’s assets should be split between countries. Emerging markets now account for 14% of holdings, the second-biggest after the UK. “Over the last ten years, we have seen emerging markets companies starting to make their stamp on the developed world. Also, liquidity and corporate governance is getting better,” Britton tells Investment Adviser.
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T Bailey Growth Fund top ten holdings
Name of holding, % of assets
Standard Life Inv UK Equity Unconstrained Inst, 6.58%
Jupiter UK Growth, 5.95%
Schroder UK Alpha Plus Acc, 5.75%
Saracen Growth Beta Acc, 5.58%
Old Mutual UK Select Smaller Companies Acc, 5.35%
Legal & General US Index Trust I Inc, 5.12%
Invesco Perpetual Income Acc, 5.05%
SG Japan CoreAlpha Prof Acc, 4.97%
Aberdeen Emerging Markets A Acc, 4.88%
Global Emerging Markets GBP, 4.50%