Lazard won the mandate to run the £400mn Mid Wynd investment trust through its commitment to cut the annual management fee by 20 per cent and its greater focus on individual stock picking.
This is according to the investment trust’s long-serving chairman Russell Napier, who told FTAdviser that Lazard’s limited presence in the retail investment management market was more likely a help than a hindrance.
Napier and his colleagues on the board of the trust were tasked with finding a fund management firm to replace Artemis, after the two individuals who ran it, Alex Illingworth and Simon Edelsten, exited the firm.
Napier hired consultancy business Barnett Waddingham to help with the search for a new firm.
“When we spoke to Barnett Waddingham, we asked that they find the best global equity managers in the world, we didn’t confine them to retail, in fact we welcomed them bringing us a firm with an institutional background as it it something different from what else is out there," Napier explained.
As part of their pitch for the contract, Lazard offered to manage the fund for 0.4 per cent per year, down from the 0.5 per cent charged previously.
Napier said: “Of course the fee level is important. However, while we didn’t get to the niggling about fees level with many firms, all of those we did get to that stage with made an offer to manage it for less than 0.5 per cent.”
When speaking about the reasons for moving away from Artemis, he said: “When they won the contract last time, it was with a team of three managers. All of those have now left the business, and while Artemis have hired a new person who is building a team there, Lazard had an established team already in place.”
The individual who will be lead manager on the trust at Lazard is Louis Florentin-Lee, who leads the team that runs the Global Quality Growth fund.
Napier said: “Quality growth is the style the trust used under the previous manager as well. What I think will be different now is the team at Artemis tended to focus on themes and then find growth stocks within that, whereas at Lazard, there will just be a focus on individual stocks, rather than themes.
"I also suspect that there will be fewer stocks in the portfolio and stocks won’t be bought and sold so frequently.”
Napier acknowledged that one of the factors he weighed up when considering Lazard was that the French firm are very large, and that Mid Wynd would be a relatively small fund for them to run.
He said: “I have just been on holiday for two weeks, but seemed to spend a lot of the time on the phone with Lazard [UK] chief executive Jeremy Taylor - that shows how important this trust is to them.
"They are trying to develop Lazard’s retail operation in the UK, and we are in the vanguard of that. It is good to be going with a firm that are not as well known in the retail space, that’s preferable to maybe working with something that has been tried before, and maybe not really worked.”
