The equity fund will invest across the spectrum of UK equities, with an emphasis on capturing upside on UK stocks that are possible bid targets or are undergoing restructuring.
Edmond de Rothschild Fund UK Synergy will follow the same investment process as the €1.4bn Edmond de Rothschild Fund Europe Synergy strategy, which is also led by fund managers Philippe Lecoq and Olivier Huet. Lecoq and Huet have worked together for 12 years and are part of a team of eight portfolio managers and one product specialist dedicated to European equities.
Both Lecoq and Huet believe there is currently a strong M&A cycle in progress, with UK stocks now looking particularly attractive after several years of underperformance.
“Our existing Edmond de Rothschild Fund Europe Synergy strategy currently holds some 30% of its assets in the UK", said Lecoq. "In the lead up to the EU referendum in June we believe that M&A activity will be slightly constrained but for the mid-term, we are expecting a flurry of M&A activity post the referendum vote when uncertainty recedes," he added.
"Corporate activity will remain strong this year and into 2017 as this kind of cycle tends to last between three and four years," continued Lecoq. "The combination of weak growth outlook and low inflation is a big incentive for corporates to transform their portfolio of assets or to consolidate some of their activities.”