THE jury is still out on whether fund management is more effective when managers are located near their markets, according to Hill Samuel Bank director of investment management Richard Nicholas. 'The last numbers I saw on that were inconclusive. It must come down to the quality of your people,' Mr Nicholas said.
'We see value in both remote and local management. We have four Asia-Pacific managers in London and four in Hong Kong, and we work very closely. It is an approach that can only work with excellent communications between the two groups.' An obvious case where it pays to be on the spot is where the manager wants to carry out personal interviews with the management of a company in which the fund has invested.
Some managers prefer their own research to reports put out by securities houses, and researching with any regularity from a remote location can be expensive, if not impossible.
Mr Nicholas forecast an increased reliance on picking individual stocks rather than markets, as regional stock markets matured. This was a factor which would weigh in favour of local management.
Mr Nicholas manages Hill Samuel's Private International Portfolio (PIP), which held US$22.3 million as of July 3. The fund returned 10.15 per cent over the 12 months to July and 13.13 per cent a year for the past five years.
'It is not a fund that I trade heavily or go looking for special situations to invest in. Its simple objective is to beat Hong Kong inflation,' he said.
