As bearish sentiment stalks investment markets worldwide, six of the Republic's leading fund managers are nailing their colours to the mast and taking on the market, and each other, in aid of charity.
The Rehab Great Investment Race pits the asset management teams of Bank of Ireland, Friends First, Hibernian, Irish Life, Pioneer and Setanta against one another in an effort to raise funds for the Rehab Group.
Each firm will be given €100,000 (£78,756) to invest on behalf of the charity from a €600,000 fund provided by the Rehab Foundation from a private donation. The race, which was launched last night by RTE broadcaster Pat Kenny, will last for a year and any profits made over the 12-month period will go to Rehab.
In the event of a negative return, the donor will bear the loss. The Irish Times will carry monthly reports on the progress of the race which is modelled on a similar event which took place in Britain in 1986. It raised £780,000 sterling (€1,267,674) for the UK charity Comic Relief from an initial fund of £210,000. Run again the following year, a profit of £809,000 was generated from an initial investment of £500,000.
The six competitors in the Rehab race are all well-known names on the Irish fund management scene. Their investment strategies vary, however, and their tactics and approaches over the next year will be closely watched to see which ones pay off best.
Bank of Ireland Asset Management (BIAM) is the largest domestic fund manager in the Republic with €20 billion in Irish assets under management while it manages €49 billion globally.
Irish Life Investment Managers (ILIM) is the next-largest home-grown player, managing €15 billion of clients' funds. Both are considered value investors, an approach which fell from favour during the bull markets of 1998 and 1999, but has come back into vogue as growth stocks such as technology shares disappointed over the last 15 months.
Value investors tend to buy stocks that look cheap compared to the market, searching out bargains, whereas growth investors target those with strong sales and earnings growth or which are operating in sectors which are showing a strong growth trend.
Hibernian Investment Managers (HIM), which includes the fund management arm of Norwich Union following the merger of the two companies last year, had €6.6 billion under management at the end of December, according to figures compiled by pension consultants Mercer.
The two smaller players in the race are Friends First Asset Management, which had assets of €4.2 billion under management at the end of last year, and Setanta Asset Management. The fund management arm of Canada Life, it was managing €2.7 billion at end-December and has been a strong performer over the last year, topping the pension league tables.
Pioneer Investment Management is the one big overseas player in the race. The fund management arm of the Italian group Unicredito Italiano, it set up in the International Financial Services Centre (IFSC) in Dublin in 1998. It manages €90 billion spread over 90 mutual funds although these are not sold here.
The rules of the competition are simple. The only criterion is that each investment must be available to private investors through a broker in a recognised stock exchange in any country in western Europe, the US, Japan, Hong Kong or Australia. The investments may include shares, currency deposits, unit trusts, futures or traded options.
The race, which begins on April 2nd and finishes on March 29th, 2002, will be officially monitored by Mercer and audited by Pricewaterhouse Coopers.
Rehab Group, which will reap the benefits depending on how well the fund managers perform, will be cheering them on from the sidelines. The not-for-profit organisation delivers training, employment, social care and commercial services to those experiencing social and economic exclusion.
It is involved in activities at 115 locations throughout Ireland and Britain, provides services to 24,000 clients and employs 1,800 people, 1,200 of them in this State.
