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Financial Security · Fund Management · Investment Strategy · Performance Fees
Nigel Legge, founder of Liontrust, launched Vinculum, a new fund management company, proposing a radical fee structure of 0.25% admin fee plus 20% of gains only if the fund beats its benchmark index quarter-on-quarter, aiming to eliminate "human error" by ignoring share prices and filtering 65,000 global companies for the 50 most financially secure.
Legge, a 29-year industry veteran, asserts that the traditional fund management industry is built for underperformance, with analysts creating "fairy tales" and fund managers making "pure guesswork" decisions, often diversifying for lack of clarity. He claims even outperformance is often "pure fluke," citing a manager who avoided bank shares before the 2008 Lehman Brothers collapse for "spurious reasons." Vinculum's strategy involves using a Danish system called StockRate, co-founded by Bjarne Jensen, to identify the strongest companies based on financial security, disregarding whether shares are "cheap" or "expensive." Investment advisers expressed skepticism, noting that many "reinvented" fund management ideas ultimately fail.
The article also briefly mentions Judge Jed Rakoff rejecting a Citigroup fraud settlement and Facebook's potential IPO.
