Investment trust insider on Gresham Strategic and Aurora – James Carthew: private-equity, small-cap pickers good value
Could value-style approaches do well in the current market environment? The universe of UK smaller company investment trusts using private equity techniques to evaluate listed companies once consisted solely of Strategic Equity Capital (SEC). It has proliferated however, and now also includes Gresham House Strategic (GHS) and Odyssean (OIT), both of which are managed by former managers of Strategic Equity Capital.
I usually lump Aurora (ARR) investment trust into this category as well. Like the others, its managers take a long-term value approach, conduct very detailed research on the companies they are interested in and operate with a very concentrated portfolio.
The types of company that these trusts buy are unlikely to include the high growth, highly valued ‘stars’ of the UK small cap market that have dominated performance league tables for the last few years. However, in the current market, where nervous investors are taking profits and the technology sector appears to be slumping, these investment companies are coming into their own. GHS tops the performance tables for the AIC’s UK Smaller Companies sector over a year and Aurora is first quartile in the UK All companies sector.
Odyssean is… read more here