Weathering repeated shocks and market volatility in the eight years since launch, the EF Tellsons Endeavour Fund is primed for growth with new hires and a refocused marketing strategy
London, March 2022: Tellsons Investors LLP have marked their eight-year anniversary by reviewing the extraordinary investment landscape the team have navigated with their Endeavour Fund since its launch in 2014 when Russian tanks first rolled into Ukraine. Greek debt default soon followed, then China devaluation, Brexit, Trump’s trade war, Covid pandemic and now as Russia’s back in the Ukraine, it seems we are back where we started. Along the way, the Fund has protected investors from, on average, 78% of the worst market sell-offs, outperforming peers in terms of return and volatility.
It has been a challenging period to grow a fund, initially seeded as the model UCITS portfolio on the private wealth platform at Merril Lynch from founder Joe Bunting’s study at home, it has grown to circa. £60m under management and now attracts some of the top ratings and rankings in the multi-asset universe alongside high Fund Manager ratings too.
Formed in the aftermath of the global financial crisis, the Partners set out to offer investors a fund that would deliver a more stable journey for their long-term investments, something they could stick with and stay committed to through the thick and thin of market volatility. In essence, that meant creating a fund that could reach out for enough growth to make the journey worthwhile in the long-term but reduce volatility through the inevitable moments of economic gloom and market stress.
Joe Bunting brought together fellow founding partners Christoph Wiedebach (CIO & Head of Research) and John Bishop (Head of Compliance) for the investment team and Michael Lindemann for business development. The partners had known or worked with each other for decades before launching the firm in 2012 and the Endeavour Fund in 2014, bringing their combined experience across asset markets with leading investment firms. They set about creating a purpose-built investment philosophy and in-house investment process for the Fund alongside a lean and efficient operating model that would be aligned with investors – just one fund, with their money invested in it.
At the heart of the fund strategy is Tellsons’ in-house PETRA research, a risk and valuation tool adapted for stocks and bonds with the building blocks in PEG ratios and concepts similar to Robert Shiller’s Excess Cape Yield. The results speak for themselves with one of the highest return profiles over multiple timeframes in its peer group but, unusually, also one of the lowest volatilities.
Speaking about the significance of the eight-year anniversary, founder Managing Partner and co-CIO Joe Bunting commented: “Even though we designed the Fund to navigate this kind of journey, if you had told us back then what lay ahead of us, we may have had rather more trepidation in setting out: we had AIFMD on our plates, RDR to follow, EMIR and DTCC directives thrown in, GDPR on the doorstep, and MIFID II coming round the corner. That all meant costs, reporting, technology, complexity…and that was just to stay as simple and straightforward as we always intended to be. It also meant more consolidation of the client base, more homogeneous asset allocations and the requirement for fewer larger funds to allocate to – this has been the toughest reality for us where being small has been such a hindrance to us getting bigger.”
“Many are sounding the death knell for the balanced growth portfolio or the ’60:40′, and given the flexibility and composition of that, we believe there really is no alternative. There’s the risks you can plan for, the known unknowns if you like, but there’s always risk, the events that just come out of left field – those are the moments when all long-term investors look for what they can really depend on, the keel that keeps you steady. That’s the protection we have underpinning all the growth and income you need to make the whole risk of the journey worthwhile. This is where Targeted Absolute Return has promised much but delivered too little, so too many hedge funds.”
Tellsons recently undertook a series of reviews to measure the fund’s risk and performance, looking at comparative returns and volatility in the IA 40-60 peer group and with a blend of passive Vanguard LifeStrategy funds in their 40% and 60% equity allocations. The EF Tellsons Endeavour Fund has been able to outperform over multiple timeframes with one of the lowest volatilities, so enhancing Sharpe ratios at the same time, and to do a comparable job of Targeted Absolute Returns in protecting to the downside.
With this risk-adjusted performance profile, Endeavour can play a useful role right across clients’ risk range: to reduce volatility at the higher growth end of the spectrum without diluting much return; to enhance return at the defensive end of the spectrum without diluting much of the preservation; and at the core of a portfolio delivering stable performance with enhanced Sharpe ratios, outperforming comparable passive solutions – all at a price that represents good value in the highly accessible cheapest share class at an OCF of 0.63%
Building on this compelling track record and keeping the business lean and focused, the future is bright for the Endeavour Fund, as Bunting explains: “We run a tight ship here with a very lean and efficient team, small compliance footprint and only a light technology load, so it’s not capital intensive either. Together with world class safeguarding and custody of client funds at Northern Trust and accounting and administration at Apex through our ACD, it makes a high quality and efficient platform. As a team, we are all invested personally in the fund, so we are fully aligned with our fellow investors. Cranley Macfarlane joined the investment team in the midst of Covid and Ludo Mori has developed the investment operations ever since launch. We have made new hires recently to strengthen our distribution and media outreach capabilities but at the heart of our proposition is the investment performance, and this is what we are dedicated to, day in day out, with perhaps more focus than anywhere else in the industry.”
“Building awareness of the Fund in the wealth and advisory community over recent years took terrible setbacks, first when we lost our fellow founder partner and lifelong friend Michael Lindemann to cancer in 2018 just as the Fund was getting into its stride, and then again with the onset of Covid. At each stage the heightened market risks forced so many potential investors to hold back and wait and see.”
Recently the fund has been approved onto the Fidelity FundsNetwork platform and has a presence now on all the major Adviser and D2C platforms – key areas that the team will be focussing on in the coming year with the experience and expertise on hand of both Tony van Gool, who recently joined the advisory board from Artemis, and Magnus Wheatley, ex-Head of Charles Stanley Direct, as the new Head of Communications.
On the fund’s eighth anniversary of its foundation, Endeavour has outperformed the IA Sector average over every timeframe and has been first quartile over three and five years as one of only a handful of top 10 funds with one of the lowest volatilities in its peer group.
IMPORTANT INFORMATION: TELLSONS INVESTORS LLP DO NOT GIVE INVESTMENT ADVICE SO YOU NEED TO DECIDE IF AN INVESTMENT IS SUITABLE FOR YOU. IF YOU ARE UNSURE WHETHER TO INVEST YOU SHOULD CONTACT A FINANCIAL ADVISER. ANY RESEARCH OR ARTICLE PRESENTED AS NEWS OR INFORMATION SHOULD NOT BE CONSTRUED AS INVESTMENT ADVICE. YOU SHOULD NOTE THAT CAPITAL IS AT RISK WITH ANY INVESTMENT AND YOU MAY GET BACK LESS THAN YOU INVESTED. PAST PERFORMANCE IS NOT A GUIDE TO FUTURE PERFORMANCE.