An update on Fairtree | Manager Research note

Fairtree: Stephen Brown – six-month sabbatical
Fairtree recently announced that Stephen Brown will be taking a six-month break from all investment activities in the business starting from 1 March 2023. Stephen Brown founded the Fairtree Equity Fund in 2011.

Impact on the equity portfolio
During this period, Cor Booysen, who worked alongside Stephen since 2012, will be responsible for decision-making and leading the team. Cor will be supported by Deon Botha, Donald Curtayne, and Chantelle Baptiste. The trio, who have covered all SA equity sectors as analysts at Fairtree, have been managing portfolios and will take on increased portfolio management responsibilities alongside Cor. Karen O’rahilly, who has been an analyst at Fairtree since 2014 and recently returned from sabbatical, and Siya Mbatha, who will join as an analyst from the global team, will add further depth from an analyst perspective.

Impact on balanced portfolios
Jacobus Lacock and Stephen Brown have been co-managers of the balanced portfolios since 2017. Jacobus will take the lead over this period and continue to work closely with Cor and the various teams.

Our view
Stephen Brown founded the Fairtree Equity Fund in 2011 and was joined by Cor in 2012. Together, they have established an impressive track record of consistent outperformance. Stephen’s experience and market insight will be missed by the team. However, with Cor having co-managed the fund for over a decade and the presence of a strong and experienced team around them, there is portfolio management and decision-making continuity in the fund.

Current outlook
This temporary challenge will test the robustness of the business process. The Fairtree team is aware that the fund’s performance will be scrutinised this year to determine whether Stephen’s absence has a material impact. The Research team notes that Stephen remains a director and material shareholder and is accessible should the team require his input.

As long-term investors in the fund, we and our clients have benefited from its consistent alpha generation over time. Although we see this as a significant event in an already challenging market, we trust the investment team and their process to continue delivering on their philosophy.