Saracen aims for growth after strong performance

Group Business Editor

Friday 11 January 2013

THE managers of Saracen Growth Fund (SGF) are aiming to increase its size significantly by bringing in more money from private client wealth managers after beating their benchmark index by a big margin last year.

GREAT RESULTS: Jim Fisher, right, and Craig Yeaman of Saracen Growth Fund.Picture: Colin Mearns

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Ian mcconnell business editor

The £35 million SGF, which is run by Jim Fisher and Craig Yeaman of Edinburgh-based Saracen Fund Managers, achieved a total return of 17.5% in 2012, ahead of a corresponding figure of 12.3% for the benchmark FTSE All-Share Index.

Investment director Mr Yeaman noted this was the 11th year of outperformance since Saracen founder Mr Fisher launched the fund in 1999. Mr Yeaman noted, since the fund's inception on March 5, 1999, it had achieved a total return of 287.9%. He contrasted this with a total return of 69.9% on the All-Share over the same period. He said: "At the end of the day, the most important thing is performance. Eleven years out of 14 [of] outperformance – we are obviously delighted with that. "The fund [is] at £35m. Really, the task this year is to grow it. We have not set any targets. What we would like, obviously, is get through £50m first of all and then grow it from there." Mr Yeaman said Saracen would be targeting wealth managers, which act on behalf of individual investors, in its drive to bring in more funds. Aberdeen Asset Management was among the strong performers within SGF's portfolio last year. Mr Yeaman said SGF, which invests in UK-listed equities from small-caps to the largest stocks, had first bought shares in Aberdeen in October 2011 at 170p. He noted Aberdeen shares ended last year at 367p, up 116% on the initial purchase price. He cited housebuilder Berkeley Group, which he noted was focused on London and south-east England, as another winner in the portfolio. He said this was the first-ever housebuilder to be owned by the fund, noting that SGF had bought Berkeley shares at 1206p each and they had risen 46% by the year-end. Mr Yeaman, declaring banks were "more willing to lend to individuals", said: "We specifically chose Berkeley Group because the London market is a one-off in terms of how it attracts foreign money. Berkeley are high-end housebuilders. With a lack of space [in its territory] and plenty of cash buyers, Berkeley is doing very well." Technology company Invensys, which comprises 5.5% of SGF's portfolio and is thus the fund's largest holding, was another star performer. Mr Yeaman observed that the £1.7bn for which Invensys had agreed to sell its rail division was about the same as its entire stock market worth on the day this deal was announced in November. Invensys shares surged on news of this sale of the rail division to Siemens of Germany. He cited oil giants BP and Royal Dutch Shell and pharmaceuticals companies GlaxoSmithKline and AstraZeneca as underperforming stocks in 2012. Mr Yeaman said of SGF's performance in 2012: "The market, particularly considering the economic background last year, performed well. We are delighted to have outperformed our benchmark." And he was upbeat about the outlook for equities. He declared: "We still think the market is looking good value. We still feel very confident about the coming 12 months." Citing his belief in the potential for equities, in comparison to other asset classes, Mr Yeaman added: "You buy UK government bonds, you have negative real return. You earn nothing on your money in the bank. Where do you go for a good return? Given you have attractive valuations in the stock market – you have a number of companies yielding 4%-plus and growing their dividends – to us it seems the obvious place to be investing." SGF last year sold its holding in Scottish video security systems specialist IndigoVision. It started reducing this holding in August at 370p-a-share and completed the disposal in November at 420p. Mr Yeaman said SGF had "done well from the holding over the years". SGF's investors include pension funds as well as wealth management firms. Saracen Fund Managers, which moved from Glasgow to Edinburgh in 2011, is owned by its staff. Mr Yeaman noted all staff had a stake, with Mr Fisher and chief executive Graham Campbell the largest shareholders.

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Saracen aims for growth after strong performance

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