| Tony Dye | ||||||
Just when you thought it was safe to go back into the stock markets, the biggest bear on the block is back.
Tony Dye, the former head of Phillips&Drew in London and one of the highest-profile torch bearers of value investing, is establishing a hedge fund that will continue to abide by his belief that global markets are overvalued.
The long/short fund, known as Contra, is due to start up at the end of January and Dye, together with his colleague Ed Knox, is currently raising funds. They hope to start off with £200 million but would settle for £50 million. Knox, like Dye is a keen supporter of value investing, having worked for Foreign&Colonial.
The fund aims to be long and short on European stocks and it will maintain a bias for the UK. As at P&D, Dye will look to buy stocks he sees as cheap within sectors. On top of this Dye will study behavioural analysis of institutional shareholders to avoid being overweight in stocks he is buying, or underweight in those he shorts.
Dye will be hoping that Dye Asset Management fares somewhat better than P&D has in recent years. Once a byword for pension fund management in the City, its performance suffered in the 1990s as Dye stuck to his guns over his prediction that the US and UK markets would crash. Minor corrections along the way were not enough to pull P&D back up the performance tables.
Many leading clients lost patience and took their business elsewhere.
Being chiefly responsible for P&D’s performance, Dye finally left the firm last March after 12 years, as it reorganized under the UBS Asset Management umbrella.
The shake-up at that time also saw the departure of Gary Brinson, the figurehead at Brinson, the US arm of the UBS investment management operation.
Dye lay low for most of the year, batting away rumours that he was planning a comeback with a hedge fund. However he did take on a role as an investment adviser to the Greater Manchester Pension Fund, a loyal and long-standing client of his at P&D.
