As we await the results of the first closing date of the Mason family's shabby bid to take their company private it is worth considering the track record of the two institutional fund managers who appear to hold the key to the outcome – Axa Framlington’s George Luckraft and Schroders Andy Brough.
The following Investors Chronicle story summarises well the situation facing shareholders.
The chances of success of the Mason family’s shabby bid to buy back their company for the third time in 20 years has been greatly helped by the decision of Axa Framlington, which owns 10.7% of Morson, to give irrevocable undertakings to accept the offer.
The delivery of the Axa stake, together with the Mason family’s 46% stake, is the reason why the Mason family and friends now have irrevocable undertakings to accept the bid from 57.37% of the existing share capital, removing a large part of any room for manoeuvre by discontented institutional shareholders.
George Luckraft, who manages the Axa Framlington Equity Income fund, has failed to explain his reasons for accepting the offer to sell his Morson stake. However, his track record, according to data on Trustnet’s ranking of fund managers, suggests that he is not a fund manager with the Midas touch.
According to the Trustnet data, George Luckraft’s investment record over 12.5 years is an annualised return of 4.8%.
By contrast, Schroders’s Andy Brough has an annualised return of 7.1% over the same period.
Trustnet's verdict on Axa Framlington's George Luckraft.
Overall, performing about the same as the peer group composite. However, over a long track record, the manager has underperformed the peer group more often than not. Poor stockpicking has had a material downward effect on results, which have tended to be relatively better in a rising market
Trustnet’s verdict on Andy Brough
Overall, performing better than the peer group composite. Over a long track record, the manager has outperformed the peer group more often than not. Good stockpicking has had a material positive impact on results, which have tended to be relatively better in a rising market.
If only Schroders Andy Brough had been Morson’s biggest minority shareholder, and not Axa Framlington’s George Luckraft, then this shabby bid might never have seen the light of day.
The next time your financial adviser suggests investing in an Axa Framlington fund, it might be worth checking whether the unlucky George Luckraft is in the investment management seat. He will be on my blacklist.