Fund Management

The Fund Management Division specialises in UK Smaller Company Investing, defined as companies with market capitalisations of under c.£1.6bn. Find out more on our Fund literature page.

Why Invest in Smaller Companies?

The pace of change has never been faster than it is today. Smaller companies are typically more dynamic than larger companies. Over the long run investing in UK smaller companies has delivered attractive returns.

Years to reach 50 million users:

Radio:

38 years

Television:

13 years

Internet:

4 years

Facebook:

100 million - 9 months

Source: Microsoft

Investment Philosophy

Long term sustainable earnings growth is the main driver of market returns. Competitively placed smaller companies have the potential to grow earnings well above market average. We place significant importance on management capability and strong shareholder alignment. For this reason, we favour family run and founder led businesses.

Investment Process

We focus on identifying companies that have the potential to grow earnings at an above average rate of 15% plus per annum for a minimum of five years and ideally much longer.

When choosing investments, we consider three characteristics to be of paramount importance.

Companies that are growing and possess all three of these attributes are able to re-invest self-generated cash at a high level of return. It is this virtuous cycle that delivers the most consistent and attractive growth in earnings. In our experience, exceptional management teams who consistently make excellent long-term capital allocation decisions are essential.

Core to the investment process is meeting company management as often as possible, with the team carrying out over 250 company meetings in the last twelve months.