Fidante Boutique to shut up shop

Aleks Vickovich & Tim Stewart

A boutique fund manager within Challenger’s Fidante Partners stable is set to cease operations from July, with another Fidante manager to take up the reins.

InvestorDaily understands the board of Fidante Partners has written to clients explaining that absolute return global equities manager Five Oceans Asset Management will close from July 2014.

“Five Oceans’ principals have decided to close the boutique because sufficient scale hasn’t been achieved,” said a source close to Fidante, speaking to InvestorDaily on condition of anonymity.

The Five Oceans World Fund will now be managed by London-based River and Mercantile Asset Management, which is also part of the Fidante group, the source said.

The change in management may result in a strategic shift for the fund, considering that Five Oceans was an absolute return manager, while River and Mercantile is known as a long only manager.

Speaking to InvestorDaily, van Eyk head of manager research Rob da Silva said he could “only presume” that the Five Oceans AM board felt the business model was “not sustainable going forward”.

Mr da Silva said that while it is “too early to flesh out exactly what the differences are” between the management styles of the two boutiques, he said the move would likely result in a change in strategy for the investors in the fund.

“Clients who went into it on the basis of the strategy that they understood may react to this change,” Mr da Silva predicted. “It is a change of strategy, which is usually fairly significant in terms of client and financial planner thinking.”

Van Eyk Research will place the fund ‘on hold’ until it has conducted “further investigation” into the nature of the new arrangement, Mr da Silva revealed, with a decision on any subsequent rating action forthcoming.

Investor Daily