CT European Select – fund manager change

Fred Jeanmaire has taken over the fund’s management alongside existing deputy manager Charlotte Burrows. Paul Doyle, Head of European Large Cap, has also been appointed co-manager.

Jeanmaire joined CT’s European equities team in 2011 and previously worked at Bank of America Securities as an equity research analyst. He also currently manages the CT Pan European Focus fund and is co-manager of the CT European fund. Doyle joined the team in 1995 and has been lead manager of CT European since 2014. He’s previously been involved in the management of the European Select and European Smaller Companies funds.

Our view

We have a positive view of Ben Moore as an investor and are disappointed to see him leave.

However, since the announcement of his departure we have met Fred Jeanmaire and Charlotte Burrows several times and carried out analysis of Jeanmaire’s track record.

Jeanmaire is an experienced investor in his own right and has managed funds that invest in European companies since 2014. During his time managing CT Pan European Focus, it’s grown 230.07%* compared with 150.42% for the MSCI Europe Index and 150.67% for the average fund in the IA Europe including UK sector. It’s a strong track record and performance has been supported by good stock selection (the ability to invest in companies that go on to perform well rather than taking a view on individual sectors or countries) over the long term, which we view positively. As always though, past performance isn’t a guide to future returns.

It's important to note the Pan European Focus fund is different as it invests in both European and UK companies, whereas European Select mainly focuses on Continental Europe. We’re mindful Jeanmaire hasn’t been lead manager of a European ex UK fund in the past, but we’re comforted that he has plenty of experience investing in European companies as part of Pan European Focus and as co-manager of CT European, which focuses on Continental Europe.

The same investment process is used throughout CT’s European equities team, so there’s continuity in the approach used to manage all their funds. The managers will continue to look for high-quality companies they believe offer sustainable returns, strong growth potential over the long run, and a competitive advantage that others struggle to replicate.

That said, we expect all fund managers to have some difference in views, even when they use the same overriding process. For example, Jeanmaire is open to investing in some companies that don’t quite meet his quality threshold but have a clear path to getting there. If this transformation is successful it could lead to a rising share price. He’ll also invest in slightly fewer companies than currently. We’re comfortable this isn’t a significant deviation from the existing process.

So far, Jeanmaire has only made a few changes to European Select, which we feel demonstrates consistency in investment philosophy and process, while ensuring it aligns with his conviction. He’ll continue to invest in a relatively concentrated number of companies, meaning each investment could have a big impact on performance, which increases risk.

Finally, while Dave Dudding is no longer deputy manager, his role and involvement remain similar. He currently manages a global fund, which also invests in Europe and uses a similar investment process. Dudding continues to regularly attend the European team’s meetings and remains influential within the team. Jeanmaire, similar to Moore, was also trained by and worked closely with Dudding earlier in his career. Jeanmaire also has the ongoing support of Burrows who remains deputy manager and Paul Doyle, another experienced manager.

Overall, we believe Jeanmaire is a well-developed fund manager with a considered approach to investing. Because of this, the continuity in process, and his impressive track record, the fund remains on the Wealth Shortlist. That said, we’ll continue to monitor the fund, including changes in investments or performance, and let investors know if our views change.

This isn’t a recommendation to make any changes to a portfolio. Investors should make sure any investments match their investment goals and attitude to risk. If you're not sure if an investment is suitable for your circumstances, please seek advice.