JohnBaronPortfolios.co.uk

SCF seeks to deliver income

In this interview we speak to manager Sue Noffke, who has been lead-manager since 2011, about how the company has changed tack through the recent inflation spike; how its flexible size and style mandate has helped it navigate recent challenges; the outlook for key holdings including Shell, AstraZeneca and GSK; and what the UK market needs to do to overcome its long malaise.

LABS is a real estate investment trust focused on delivering strong total returns from a portfolio of properties leased to tenants operating in the UK life science sector. The company buys and develops properties specifically in the so-called Golden Triangle of Oxford, Cambridge, and King’s Cross in London - the beating heart of the UK’s world-leading life science industries.

In this interview we speak to manager Simon Farnsworth about the advantages of having a specialist focus in real estate; how the specific demands of life science tenants create greater opportunity to unlock value through asset management of its estate; how the company balances acquisition and development in regions facing extreme planning challenges; and why government support for UK life sciences and the proximity to leading academic institutions in its target regions is creating a long-term tailwind.

HFEL is an investment company that seeks to deliver a growing dividend for its shareholders along with capital growth from a portfolio of around 60 companies across the Asia Pacific region. The company targets high and sustainable dividends from companies in the region’s more mature markets such as Australia and South Korea, and those in its faster growing economies that have a higher potential for dividend growth, including India and Indonesia.

In this interview John speaks with manager Sat Duhra – who co-manages the company alongside Mike Kerley, until the latter shortly retires – about how the trust has navigated a difficult year for Asian equities; why the team have reduced exposure to China in favour of India; the growing technological capabilities of Asian companies, and the increasing penetration of Asian brands into global markets; and the attractiveness of Asian equity valuations in the context of their rapid growth prospects and growing economic resilience.

EDIN appears on the Podcast page for the second time to coincide with a change of the company’s management this month. Retiring lead portfolio manager James de Uphaugh will be succeeded by Imran Sattar, currently deputy portfolio manager, while long-standing Liontrust fund manager Emily Barnard will become deputy portfolio manager.

In this interview John speaks with Imran Sattar and Liontrust Head of Investment Companies James Mowat about how the robust processes employed to manage the trust brings continuity alongside the change of managers; how the company’s flexible mandate and focus on stock selection has allowed it to achieve its primary objective of growing its dividend at a faster rate than inflation; the catalysts for improvement in some out of favour holdings that have proved significant contributors to performance; and details of the thematic framework used to evaluate investment opportunities. 

ARR is an investment company that follows a value-led, high-conviction approach, typically holding between 12 and 20 investments. The company employs a deep research process to identify businesses that can deliver high returns on capital, often looking to out-of-favour areas of the market to find attractively valued shares.

In this interview John Hughman speaks to Gary Channon, founder and chief investment offer of Aurora’s manager Phoenix Asset Management Partners, about how his ‘Buffett epiphany’ led him to establish the company and influenced its investment philosophy; the importance of company management, and why meeting management only ever comes at the end of Aurora’s long research process; how understanding psychology is built into the investment approach; and why the company’s biggest mistake came from selling a share too soon.

ORIT is an ‘impact’ investment company that aims to deliver capital growth and income to its investors by investing in a technologically and geographically diversified portfolio of renewable energy assets across the UK, Europe, and Australia. As a leading exponent of the transition to net zero, ORIT is held within the website’s Green and Green ISA portfolios.

In this interview John Hughman speaks with investment director David Bird about why diversification is so important for investors in renewable energy; how the company balances income generation and capital growth by investing across a spectrum of development, construction, and operational assets; the need for renewable investment to underpin future economic growth and national security; and how the company approaches investment in new renewable technologies such as battery storage and green hydrogen.

MMIT is an investment company that offers a high conviction portfolio of 20-30 smaller companies across emerging and frontier markets. Managed by seasoned emerging market investors Mark Mobius and Carlos Hardenberg, the company actively seeks to differentiate itself from broader emerging market benchmarks, with a heavy weighting towards high technology and healthcare businesses.

In this interview we speak to Carlos Hardenberg about why the company’s strategy is to target profitable and innovative mid-cap companies in emerging markets; the deep investigative process behind stock selection, which includes screening for quality factors, economic moats, and entrepreneurial management; why bottom up analysis needs to be overlaid with a robust view of macroeconomic factors; why emerging markets no longer deserve their reputation as being higher risk vis-à-vis developed markets, and their underappreciated global potential in technology industries; and why the trust favours India and other emerging Asian regions over China.

CYN is an investment company focused on the natural resources sector, with the aim of providing investors with both capital and income growth through both equity and fixed income investments in mining and energy companies. The trust is co-managed by Ian ‘Franco’ Francis, Keith Watson and Robert Crayfourd and has delivered a NAV return of more than 600% since its launch in August 2003.

In this interview we speak to Robert Crayfourd and Keith Watson about why the resource investor currently sees more opportunity in the energy sector than mining; how it’s managing the energy transition, both through investments in battery metals and via transition fuels such as gas and clean coal, which it sees as being imprudently excluded from some portfolios; the problems with government energy policy, and how the trust’s managers keep abreast of rising geopolitical risk and resource nationalism; what catalyst is required to kickstart investment in much needed supply after many years where the focus has been mainly on shareholder returns; and the managers’ views on short-term resource demand concerns caused by economic weakness, especially in China, and why an inflationary environment could continue to be supportive for commodity investing.

SCP is an investment company focused on the UK's mid cap index, the FTSE 250. The company takes a high conviction approach, holding around 50 companies that it believes have the potential to grow into market leaders.

In this interview John Hughman speaks with the company's lead manager Jean Roche about how good stock selection has kept the trust's performance in step with the S&P 500 over the long-term on a total return basis; the importance of dividends and dividend growth to the trust's strong track record; why she's more bullish about the UK economy and market - and the UK consumer - than most; and how building ESG analysis into the investment process can improve returns.

When it floated in May 2023, AWEM became the first investment company to join the London market in 17 months. The company’s aim is to generate long-term capital growth by investing in securities that provide exposure to global emerging markets (EM), including companies on Western exchanges with EM exposure.

In this interview we spoke to Prashant Khemka, founder of WhiteOak and manager of AWEM and sister company Ashoka India Equity (AIE) about overcoming the challenges faced in bringing the trust to market; the comparative growth attractions of emerging markets when compared to Western counterparts; the company’s rigorous valuation and risk-based stock selection process; and the company’s views on the profound geopolitical shifts currently taking place.