The bottom-up focused fund, managed by Carlos Moreno and Thomas Brown, will have an initial focus on high growth companies in Scandinavia. Moreno and Brown have previously worked together at Thames River.
Currently, Sweden accounts for 22.21% of the fund’s initial weight), Italy (mid-cap family businesses), France and Germany. The remaining European countries account for less than 10% each.
The fund managers will follow a bottom-up stock picking approach and diversify away macro exposure. At a breakfast presentation on Tuesday Moreno and Brown said they will “favour companies that can create shareholder value through growing revenues, expanding margins and increasing return on capital and where the value creation potential is currently not reflected in the share price.” One such example is Ion Beam Applications, a provider of proton therapy solutions for cancer treatment.
More company examples in terms of demographics are Carl Zeiss, Straumann and Luxottica. For technical excellence, the fund managers like Geberit, Belimo, Sika and Assa Abloy. Eurofin Scientific, Tods, Brunello Cucinelli and H&M are expected to benefit from the continued globalisation, while Schibsted, Avanza, Betsson and Ubisoft will be key players online.
The pair also like Schibsted which they feel is one of the most successful media companies in the world with an outreach in Scandinavia and France, as well as in embryonic markets like Brazil and Indonesia.
To be foudn in the IA Europe ex UK sector, the multi-cap income and growth fund will have a substantial mid-cap bias. It will hold 40-55 holdings with a 1%-4% position size.
Meanwhile, the fund will shy away from sectors such as utilities and large oil companies, airlines and areas of retail, telecomms, pharmaceuticals, as well as resources and mining. The fund will not invest in any of the top 10 index holdings.
The investment approach consists of a focus on world leaders in their niche, revenue growth, the ability to invest at the same -or better – rate of return and to buy companies that are changing for the better. According to Moreno, the fund managers will focus on what the business will look like in five years’ time.
