GO Investment Partners closes European Focus Funds to concentrate on Japan strategy

Ex-CalPERS CEO Burton stepping down as chair

Go Investment Partners, the UK house formerly called Governance for Owners that was set up by former Hermes executives Peter Butler and Steve Brown, is closing its European Focus Funds to concentrate on its Japanese joint venture with Tokio Marine Asset Management.

The strategy, which a year ago had around €500m in assets, was set up to be a catalyst for corporate change in quoted small and mid-cap European companies and had attracted investment from the likes Sweden’s Fjarde AP-fonden (AP4).

It’s also emerged that James Burton, the former chief executive of the California Public Employees Retirement System (CalPERS) and the World Gold Council who has chaired GO for three years, is stepping down from that role. A new chair will be named shortly, Brown told RI.

“GO Investment Partners is to concentrate its activities on the TMAM-GO Japanese Engagement Fund (JEF), which is managed as a joint venture with Tokio Marine Asset Management (TMAM), and will close its GO European Focus Funds,” GO said in a trading update.

It said the liquidation of the GO European Focus Funds is “substantially complete” with 90% of the capital already returned to investors. The remaining capital will be distributed following an audit of the funds in the fourth quarter of this year. There have been no redemptions and all cash is being returned in its entirety, Brown said.

The firm’s European small and mid-cap benchmarked funds were launched in 2008.Since then the return was 7.9% a year (net of all fees and expenses).

GO said: “This has been below our expectations against a background of very low returns in European equity markets.” Over the same period the MSCI Europe small and mid-cap index returned 6.2% pa and the wider MSCI Europe index has returned 3.4% pa.

The move has meant staff losses, with Brown saying: “We’ve downsized substantially. The European fund team has gone.”

The firm will now focus on its JPY59bn ($529m) Japanese Engagement Fund, which it said has returned 24.1% p.a. since its launch in 2012. Brown says Japan is “the biggest opportunity in developed markets right now”, noting how the firm had two executives on the committee which drew up the country’s new Stewardship Code.

The latest development caps an interesting few years at GO. In 2014 its Stewardship Services engagement team headed by Josiane Fanguinovény merged with GES, the Stockholm-based ESG research house. It came as GO withdrew from engagement to focus solely on investment; the revamp also saw the departure of CEO Stephen Cohen after less than two years in post.
GO had heavyweight backing at inception from CalPERS, though Brown said the giant fund wound down its stake some time ago. Corporate governance pioneer Bob Monks remains a shareholder, as does UK rail industry scheme Railpen, Brown said.