This is a relatively new strategy and was our first introduction to the team. We know the fund manager who ran a successful European strategy at Neptune (which is now part of Liontrust). The business was set up nearly three years ago as a European specialist and Rob is supported by two Investment Analysts. All the employees in the business are shareholders and invest in the funds with the aim of ensuring that they are all aligned with the clients who invest in the funds.
Over the last ten years only one style of investing has worked and this sits at the opposite side of this. They view everything from a historical perspective and look at what has consistently worked over the last 100 years, and that leads to the style of investing as they do which is value (i.e., buying cheap). This has consistently worked except for the last 10 years and in the 1930s.
They believe that although they are value investors, it must be value with a catalyst. Being able to identify cheap companies is not hard to do but finding those with operational momentum is harder. Where they can find companies with earnings growth, those that are growing and those that have strong balance sheets, then they have the ingredients for a business that can beat the index. The types of companies are likely to be those that have had a tough time and that are coming to an end. They do not like businesses with high levels of debt or those that have diluted their shares by raising capital….read more