London-based Sturgeon Ventures, has launched a non-profit fixed income portfolio management service for charities, which are overlooked by large fund managers because they have less than £20 million to invest.
Sturgeon Ventures new service for charities will use a transparent and ethical investment process to provide customised fixed income solutions and manage funds on both a discretionary and advisory basis, according to Opalesque.
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Bob Devine with more than 40 years investment experience has been appointed as portfolio manager for the new service.
Solutions will be designed to meet client-specific needs and to deliver real income above inflation, using a combination of short duration UK and international bonds, hedged for currency risk.
The minimum investment for the service is £250,000 and will be offered directly to charities, inter-faith, school and college foundations and through financial intermediaries such as IFAs, accountants and solicitors, reported Opalesque.
There is no initial charge for the service but has an annual management fee ranging from 0.75% on the first £1 million invested; 0.60% on the next £4 million; 0.45% on the next £5 million and 0.25% on the next £10 million. This fee covers wage and administration costs only.
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By GlobalDataSturgeon will not receive initial commission from any third party fund managers. An introductory fee is negotiable with intermediaries and a fee of 0.15% per annum is charged to cover custody/settlement and dealing costs.
According to Sturgeon Ventures, the regulatory incubator, policymakers will stay away from increasing interest rates for some years to avoid killing off economic recovery while older investors and institutions looking for income will support the bond market in the long term.
The custodian for client assets is the Royal Bank of Canada (RBC) Channel Islands; Kleinwort Benson Bank Guernsey; and KAS Bank UK.
Devine said: "Research indicates there is a lot of spare capacity in the economy and GDP growth could continue to rise significantly before capacity constraints appear and rates have to rise to cap inflationary pressures.
"In the longer term, there will always be investors providing support to the bond market.
"Sturgeon believes that some market players have acted irresponsibly by pushing yields and creating volatility. Mark Carney’s policy of forward guidance was a genuine attempt to give industry and long-term investors the confidence to invest for longer term economic growth and jobs. The actions of short-term speculators has been unhelpful and ultimately, self-defeating too," he added.
Seonaid Mackenzie, managing partner at Sturgeon, said: "Many large investment management firms either do not focus on charities or show no interest in the sub-£2 0million arena. We are this servie to such charities, which need guidance on how to preserve their capital and generate income, especially in the volatile markets we have seen in recent years, but they are usually overlooked by investment management firms for being too small."
