Provisca to distribute Heptagon Capital’s UCITS funds

Provisca, the international distribution business launched last year by two veterans of the cross-border financial services industry, has announced that it has formed a distribution partnership with London-based Heptagon Capital, to distribute a selection of its best-known funds to the international advisory and wealth management market.

Heptagon is a US$8bn (£6.2bn, €7.5bn), privately-held asset manager that has traditionally focused on family offices, institutional investors and the ultra-high-net-worth individuals market.

The 11 funds Provisca plans to offer the international market are Dublin-domiciled UCITS funds, and include three funds that are run in-house by Heptagon as well as eight funds that are sub-advised by well-established managers that Heptagon partners with.

The funds will be offered in a retail-investor-friendly yet low-fee format, and will be available in a range of currency classes, depending on the fund in question.

Among the best-known of the Heptagon range Provisca will be offering will be the Kopernik Global All Cap Equity Fund, managed by  Dave Iben, a well-known value investor based in Tampa, Florida. (Iben is pictured above, in front of the Tampa Convention Center.)

According to Provisca, at a time when many other asset houses are experiencing major outflows, assets in this fund have risen to US$304m, following a 52% return in 2016.

Total assets in the strategy recently surpassed $2.5bn, and, while Kopernik has announced plans to soft close the US mutual fund channel to investors, “the UCITS fund vehicle remains unaffected and open to the clients of international advisers,” Provisca said, in a statement announcing the new Heptagon deal.

Provisca founder and partner Bryan Low said the Heptagon offering was in line with Provisca’s aim “of bringing more product choice to international advisers and their clients, backed by major blue chip providers”.

In an interview, he and partner Nigel Watson said Provisca would begin offering the new range to investors next week.

Other ‘star managers’

Other so-called “star managers” in the Heptagon stable were added earlier this year, according to Low and Watson: WCM Investment Management, an employee-owned asset manager based in California, which manages more than US$15bn; and Driehaus Capital Management, the Chicago-based privately-held asset management firm, which has more than US$8bn under management.

The Heptagon WCM Global Equity Fund  mirrors the $1.5bn that WCM manages in its concentrated global equity strategy that has produced an annualized return of 9.9%, versus 4.5% its MSCI benchmark, for the period beginning with its inception in March 2008 to the end of December, 2016, according to Provisca.

The Driehaus US Micro Cap strategy, meanwhile, according to Low, has outperformed in 18 out of its 20 years of existence, and its composite “is the top-performing US equity strategy of any style in the eVestment All US Equity Universe over that period”.

Also included in the Heptagon UCITS fund range are three other US-based specialist equity managers: Cushing Asset Management, Nicholas Company, and Yacktman Asset Management.

In other regions, Harvest Global Investments, part of one of the largest asset managers in China, is the sub-investment manager appointed to the Heptagon Harvest China A Shares Equity Fund.

‘Not normally available’

Provisca founder Watson, who is also the firm’s sales director, stressed that all of the funds being offered through the partnership with Heptagon were “not normally available in the international retail space”, and were “all UCITS, daily-dealing, and fully liquid and therefore permissible through all usual investment platforms and life companies”.

And although multi-asset products have been “in favour” recently, he noted, the Heptagon range offered “great investment opportunities as a satellite hold to more passive core holdings [as well as to widen] portfolio diversification, with the potential to add alpha to a client’s investment.”

Previous deals

As reported, Low and Watson signed their first distribution deal with South Africa’s Momentum Wealth International last year, to market and distribute its investment platform outside of South Africa.

In February they announced they were adding the Isle of Man-based, high-end QROPS Bureau advice service to their product stable.

They founded Provisca, which is based in the UK, in response to what they say is an un-met need in the marketplace for a channel capable of bringing established, well-regulated, “blue chip” investment products to investors in markets outside of their own.

Growing international regulation, they argue, has forced wealth managers to take greater care in the products and services they recommend for their clients.

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