The firm, which takes its name from the expression that, in one definition, means “bond signifying union or unity”, is also founded by Bjarne Jensen, current CEO of StockRate Asset Management; Niels Jensen, managing partner of Absolute Return Partners and Douglas Thursby-Pelham, a marketing and communications specialist.

As part of the venture, a new fund company, IM Vinculum Funds, which is an FSA-authorised Open Ended Investment Company, will launch a series of funds, with the first, called the IM Vinculum Global Equity Fund, due for rollout on 3 January next year. This fund will be composed of 50 globally-listed stocks, and will be designed to provide long-term capital appreciation in excess of the MSCI World TR benchmark, the firm said in a statement. Vinculum will charge no management fees on its funds and will be instead be paid when its funds outperform a specific market benchmark.

However, the only fixed charge will be an annual charge of 0.25 per cent of funds under management which will be paid directly to IFDS Managers, the new fund’s authorised corporate director, which is the external specialist appointed to operate and administer it, Vinculum said. 

The move is interesting: there is debate in the industry about whether firms which levy annual fees should also charge performance haircuts if a fund outperforms its peers.

The move represents another investment adventure for Legge, who left Liontrust in 2010 after a period of mixed fortunes for the investment house. He co-founded Liontrust in 1994; the business floated on the stock market in 1999. In November, Liontrust reported that it had swung back into a pre-tax profit of £1.7 million (around $2.73 million) in the first six months of this year, compared with a loss of £3.9 million for the same period a year ago.

Legge has been an outspoken figure in the industry. Commenting on his new venture, he said the fund management sector needs a shake-up.

“Bjarne and I have been talking about teaming up since early 2009…There are an awful lot of things about our industry that investors are beginning, justifiably in my opinion, to rail against – unfair pricing, inconsistency of intra-company process across products, underperformance due to human error, the overly hubristic trading culture and much more besides.  With Vinculum we are looking to shake things up a bit, put these things right and offer investors real value for money,” Legge said.

Vinculum will specialise creating and running long-only equity portfolios, taking sole use and branding rights on the proprietary investment process of StockRate. This system, a statement from Vinculum said, “aims to deliver long term capital appreciation by identifying and investing in companies of the highest economic quality”.

The stock-picking process is not affected by valuation or forecasting and “looks to minimise human error in the stock selection process”, the statement said.