Covestone anticipates breaking even this year despite losses in 2013

Dublin-based Covestone Asset Management expects to break even this year and to make its first full-year profit in 2015, its founder and director Donal Roche has told The Irish Times.

Latest accounts for Covestone Asset Management Ltd show it made a loss last year of €91,404. Its accumulated losses since it was set up in 2010 amounted to €702,359.

The abridged financial statements reveal it is “well-capitalised to absorb those losses” and Mr Roche, as the main shareholder, was “willing” to provide additional capital. The company closed last year with equity shareholders’ funds of €327,642.

Mr Roche said the losses were due to the costs of setting up a high-quality team of asset managers to run its funds. It has 11 people on the payroll.

Its assets under management amount to about €140 million and it manages funds on behalf of wealthy families, corporates and charities.

“The company is now operating profitably,” Mr Roche said. “I see this as a long-term process, building a business for the next 10 to 12 years. We had to invest significantly in building an asset management team. It’s going to go very well next year.”

Covestone operates three funds – a conservative fund, a global value fund and two empiricus funds, which are 100 per cent invested in equities. In the year to date, the returns have ranged from 6.3 per cent (an empiricus fund) down to 2.84 per cent (global value). Northern Trust acts as custodian to the company.

‘Fresh approach’

Mr Roche (61) is a former managing partner of Matheson Ormsby Prentice Solicitors, a position which he held for nine years. He founded Covestone as a family office to bring a "fresh approach" to investing. Two of his daughters are involved in the business.

Mr Roche is also chairman of Barclays Bank Ireland plc.

Other members of Covestone's board include David Went and Jim Milton.