By Annabel Brodie-Smith
I hope you have had a lovely summer. Our staycation was made much more exciting by two new additions to the family. Sherlock, the boisterous and bouncy puppy, rescued from Hungary and Moriarty, the eight-week-old silver tabby kitten. They are keeping me very busy and my step count has gone through the roof!
It’s back to school for the boys and my youngest son, Fabian is now at secondary school – very grown up. And it’s back to school for us! Yes I am writing this from the office (sadly no pets allowed). It’s day three back in the City. It’s been quite a shock to the system (up at 6am, season ticket, heels) but it’s lovely to see my colleagues again. We are now hybrid working – three days a week in the office and two from home.
We also have a new Chief Executive joining the AIC on Monday, Richard Stone. Previously Richard worked at the Share Centre platform and is sure to bring a fresh perspective to the industry. That means we’re saying goodbye to Ian Sayers and we wish him all the best for the future.
This summer has been dominated by US private equity takeovers of UK listed companies. With the bid for Morrisons now going to an auction and Ultra Electronics making headlines, we thought it would be interesting to find out investment company managers’ views on private equity’s activity in the UK markets.
Is it an opportunity or a threat and what can investors do to benefit from this trend? The views of James Henderson, Co-Portfolio Manager of Lowland Investment Company, Henderson Opportunities Trust and Law Debenture make interesting reading: “if sound companies are taken over at low valuations it is detrimental to long-term returns from the quoted sector so, in my view, it’s important the current owners of these companies don't allow this happen.”
On a more sombre topic, I’m sure you are aware that tomorrow is the 20th anniversary of the horrific September 11 terrorist attacks. In his piece, Ian Cowie focuses on the geopolitical and economic context of these tragic events. He also examines the 42 investment companies which have become ‘ten baggers’ since September 11, 2001, growing an investment of £1,000 at the time to more than £10,000 today.
The key investment themes of technology, Asia and smaller and medium-sized companies come though clearly in the 42 best-performing investment companies. The top performer, Scottish Mortgage combines all three of these themes with a current value of £28,786 on £1,000 invested at the time of 9/11. It’s an uncertain and unpredictable world (the financial crisis, the pandemic…) but Ian believes: “the evidence of the past provides investment companies’ shareholders with some grounds for cautious optimism.”
The AIC’s Flexible Investment sector includes well-known investment companies like Capital Gearing, Ruffer, Personal Assets and RIT Capital Partners as well as many others. This month investment journalist, Faith Glasgow delves into the sector explaining its purpose and analysing the diverse smorgasbord of companies. There’s some insightful comments from Andrew McHattie, the publisher of Investment Trust Newsletter.
Finally, with the Canadian election approaching on 20 September, we’ve looked at the opportunities Canada presents for investors and how the election might affect their holdings. There’s a lot more investment companies with a high allocation to Canada than you’d think.
Wishing you all the best for September – let’s hope the Indian summer returns soon!
Annabel Brodie-Smith Communications Director, AIC
