WS Amati Strategic Metals
The WS Amati Strategic Metals fund is an active, high-conviction portfolio whose investment process is driven both by bottom-up analysis and the prevailing macroeconomic environment. The strategy places great emphasis on the stage in which metals are in their cycle. The managers will only invest in internationally listed metals and mining companies whose revenues are sourced from the sale of strategic metals. These are metals that have strategic importance to the global economy and future macroeconomic trends, which include amongst others, gold, copper, nickel, silver, and lithium.
Previously TB Amati Strategic Metals
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Georges Lequime, Co-Manager Georges holds a BSc in Mining and initially worked for Anglo American in the South African gold and coal mining industry. He later managed the Old Mutual Gold Fund, which was the largest gold fund in South Africa. Georges has extensive experience as a resource equity analyst, having spent nine years in New York and London. He led HSBC Global Mining in 2002 and subsequently headed RBC Capital Markets' equity research in London. Currently, Georges is an analyst for several specialist resource funds, including the Junior Resources Fund.
Mark Smith, Co-Manager N/A
Georges Lequime, Co-Manager Georges holds a BSc in Mining and initially worked for Anglo American in the South African gold and coal mining industry. He later managed the Old Mutual Gold Fund, which was the largest gold fund in South Africa. Georges has extensive experience as a resource equity analyst, having spent nine years in New York and London. He led HSBC Global Mining in 2002 and subsequently headed RBC Capital Markets' equity research in London. Currently, Georges is an analyst for several specialist resource funds, including the Junior Resources Fund.
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Investment process
Each metal has its own cycle, and the managers will look to determine the optimum combination of precious, speciality and base metals at any given time, whilst also taking account of the over-arching macroeconomic and political risks and commodity price movements, as well as the specific circumstances of individual companies.
The managers tend to target medium to smaller-sized mining firms that can meaningfully grow the value of their business through exploration success and the de-risking of the project build. This naturally screens out large mature companies that are reliant on higher commodity prices to enhance the value of their businesses.
Commodity-based broker research, sector-specific conferences and company presentations, as well as internal supply-demand models,help formulate sector allocation within the portfolio. The managers aim to identify undervalued public companies in the sector before they are widely covered by the broking community using their accumulated knowledge and industry relationships.
The managers value face-to-face meetings but will also use conference calls given the team’s long-term knowledge and relationships with various management teams. Companies' accounts are scrutinised with importance placed on those that are financed appropriately for the nature, maturity, and cyclicality of their business. The structure of the board and their remuneration, share ownership and incentivisation are also a valuable part of the analysis.
The portfolio is limited to around 35 holdings with the maximum amount in any single metals segment set to 70% of the portfolio. Initial holdings are typically introduced at a 1-2% weighting that can rise to 5% subject to liquidity. The maximum exposure of one holding is 8%.
Risk
Risk is managed by investing across a range of strategic metals to limit the impact of unfavourable market conditions and other issues. The managers typically invest in more highly capitalised stocks to reduce liquidity risk. They also diversify across geographies so that they are more insulated from social, political, and economic issues in specific areas.
ESG
ESG - Integrated
The fund managers integrate ESG considerations into their decision-making process. ESG is an issue that is engaged with in some aspect during almost every interaction with an investee or potential investee companies. Here they consider what broader social and environmental impact these companies have. They analyse the corporate governance practices and broader social themes such as political freedom, democracy, and the civil liberties in which the companies operate.
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