This publication recently interviewed the manager who believes that high-conviction investment and a concentrated portfolio is essential for those paying for genuine active management of their money.
Unsurprisingly, the Polen Capital approach comes at one end of a debate that continues in wealth management – is it worthwhile paying a manager a fee to obtain superior performance or is this a mug’s game, given how even the cleverest managers find it hard to repeat such cleverness year after year in liquid, well-analysed markets?
What is clear is that Pick believes his firm is making a strong statement about what its clients pay for: the funds it operates will not be hugging any benchmarks. And the concentrated approach means a firm can make up 3.5 per cent of a portfolio holding or more. According to a February factsheet of the newest fund, card firm Visa accounted for 5.01 per cent of the portfolio, with Google making up 4.71 per cent and Nestle, the Swiss-listed drinks and foods group, 4.66 per cent.
“If you are an active fund manager holding hundreds of positions, it is very hard for those positions to add much at all other than to be a distraction and adding costs,” Pick said.
“To do the right thing by the client, you have to be better than average and do something different. We are best suited to clients who want to invest for the long haul and to the idea that there is no such thing as an investment `black box’,” he said.
Polen Capital intends to register the fund in a range of global markets, including those in Asia and the Middle East.
Over the long haul, investors will have a clear chance to see if Polen's concentrated approach pays off - or not.