A value fund with a decidedly fine focus

Active management can work if a fund is small and focused. Adam Rackley has big plans, he tells Merryn Somerset Webb.

When Adam Rackley was setting up his fledgling value fund last October, he focused on what he sees as the industry's biggest problems: size and fees. He will "soft close" the fund at £100m (no new clients will be able to invest) and "hard close" it at £200m (existing clients won't be able to top up). That £200m will be invested in a very concentrated portfolio of equities the top ten holdings currently make up more than 55% of the fund and he doesn't plan to have much more than 20 holdings over the long term. That's quite something in an industry where holdings in a big fund will easily top 75.But in today's industry, it makes sense too.

"One of my goals was to provide genuine active management against a backdrop of mega funds that over time have no choice but to become market trackers," says Rackley. If you have £1bn in a fund and, as a result, have to hold 80 stocks, your stock picking and the performance of any individual stock is "neither here nor there". Hence, huge funds almost always end up as de facto index trackers.

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Merryn Somerset Webb

Merryn Somerset Webb started her career in Tokyo at public broadcaster NHK before becoming a Japanese equity broker at what was then Warburgs. She went on to work at SBC and UBS without moving from her desk in Kamiyacho (it was the age of mergers).

After five years in Japan she returned to work in the UK at Paribas. This soon became BNP Paribas. Again, no desk move was required. On leaving the City, Merryn helped The Week magazine with its City pages before becoming the launch editor of MoneyWeek in 2000 and taking on columns first in the Sunday Times and then in 2009 in the Financial Times

Twenty years on, MoneyWeek is the best-selling financial magazine in the UK. Merryn was its Editor in Chief until 2022. She is now a senior columnist at Bloomberg and host of the Merryn Talks Money podcast -  but still writes for Moneyweek monthly. 

Merryn is also is a non executive director of two investment trusts – BlackRock Throgmorton, and the Murray Income Investment Trust.