Unicorn star manager McClure dies suddenly

John McClure, who managed the top-performing £676.7 million Unicorn UK Income fund, as well as the £87 million Unicorn UK Smaller Companies, £30 million Unicorn UK Growth and £24.7 million Unicorn Outstanding British Companies funds, has died, according to a stockmarket announcement on Monday morning.

McClure ran both income and growth portfolios to great effect, with a special nose for small companies, but was best known for running the Unicorn UK Income fund, which he has managed since its launch in May 2004.

While his style was best suited to growth markets, the fund has returned 256% over the last five years, which puts it right at the top of its peer group.

As recently as January, Fraser Mackersie and Simon Moon were promoted to co-manage the fund alongside McClure.

The company's statement said that Moon and Mackersie, "the other co-managers of the company's smaller companies portfolio who have worked with John since 2008, maintain responsibility for the portfolio".

Strong inflows

The fund recently attracted strong inflows as an alternative to Invesco Income and High Income following the resignation of Neil Woodford. In September 2012 the fund had assets under management of £55 million but that has since soared to £716 million.

McClure has specialised in UK smaller companies for over 20 years. Before joining Unicorn Asset Management in July 2000, McClure was responsible for running smaller company portfolios at both Granville and Guinness Flight Global Asset Management. Prior to this he managed funds at United Friendly Assurance and Hermes Asset Management.

In April Unicorn said it was planning to launch a UK special situations-type fund for McClure later this year.

Justin Modray, founder of Candid Money, says: "John McClure built an outstanding fund management track record over his career and was rightly regarded as one of the best smaller companies managers in the business. His team should prove more than capable of holding the fort shorter term but whether his absence will impact on longer-term returns remains to be seen.

"I don't think investors need to make any rash decisions, but they may want to review their holding over the next few months as plans for the fund become clearer."

"Very sad news"

Patrick Connolly, a certified financial planner at Chase de Vere, adds: "John's death is very sad news for all those who knew him, for his investors and for the investment industry as a whole.

"Existing investors should see who takes over the funds he was running, whether they have a similar level of expertise and whether anything will change in terms of how the funds will be run, in particular whether they will retain such a bias toward small caps. Investors shouldn't commit new money to these funds until there is some clarity over what happens next."

Geared ordinary shares of Acorn Income, a closed-end split-capital investment company that McClure also co-managed, fell 3.28% in early trading to 350.10p.

Unicorn Outstanding British Companies and Unicorn Income are both Money Observer Rated Funds for 2014. Unicorn UK Income is also a member of the Money Observer Model Portfolios.

Money Observer editor Andrew Pitts says: "John McClure's sudden death is very sad. However we will not be rushing to dump the funds from our portfolios when there are two co-fund managers who have yet to prove they are not up to the job."