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IFSL Marlborough Special Situations
Management of IFSL Marlborough Special Situations fund is outsourced to Hargreave Hale, one of the best small-cap boutiques in the country. The fund has a small and mid-cap focus, and is co-managed by Eustace Santa Barbara and Guy Feld.
Our opinion
The Hargreave Hale team have a richly deserved reputation as astute stock pickers. The process, while perhaps not as clearly defined as some others, has held up well across a wide range of market conditions and the long-term track record of this fund is exemplary. We regard Hargreave Hale as one of the premier small-cap boutiques and this fund lives up to the billing. Marlborough Special Situations is an excellent way of obtaining exposure to the mid- and small-cap area of the UK market.Company description
IFSL Marlborough Fund Managers offers investments across various asset classes, ranging from UK fixed interest to international equities and exchange traded funds (ETFs). They were awarded the Elite Provider for Equities rating each year from 2016 to 2021. IFSL Marlborough’s managers are hand-picked and given freedom to invest as they feel optimal in the fund’s sector.
Hargreave Hale, who are investment managers for some of IFSL Marlborough’s funds, are a merger of Hargreave Investment Management and Hargreave Hale & Co, the former having been founded in 1986. The management of this fund is outsourced to the Hargreave Hale team, who are recognised specialists in the small-cap space.
Fund manager
Eustace Santa Barbara manages this fund alongside Guy Feld. Eustace has co-managed this fund since September 2014, having joined the company in December 2013, and previously worked as senior investment manager at Close Brothers Asset Management. Guy Feld has more than 20 years’ experience investing in small caps. He joined Marlborough in 2003 and became co-manager in January 2021. Giles Hargreave, who had managed the fund since 1998, stepped back from his role in January 2021, but continues to lead the team’s weekly investment meeting.
Nothing better than a growth stock on a value rating.
Eustace Santa BarbaraFund manager
Investment process
The team uses its views on the wider economy to filter out large numbers of stocks and sectors, before undertaking analysis through company meetings and stock analysis. IFSL Marlborough Special Situations typically holds around 200 companies to reduce stock-specific risk. Relatively small positions are taken initially, and the managers will then run their winners aggressively, adding to them as their story unfolds. Conversely, losers will be cut quickly. The fund has evolved as it has grown over the years and now invests in both small and medium-sized companies.
ESG
ESG - Limited
Guy and Eustace have a strong focus on governance with this fund. This is particularly important in the smaller companies space, as management decisions can have a significant impact on a business’ operations and outcomes. As such, the managers spend considerable time with the management teams behind potential investment companies to understand how they treat employees, suppliers and customers as well as their attitude towards their company’s impact on wider society. They specifically look at board composition and do not like seeing one individual filling both the CEO and Chairman roles, or too many unnecessary non-execs. They will often work with boards to improve these factors. Both Guy and Eustace will look for red flags relating to ESG matters, such as environmental pollution, high staff turnover and questionable payment policies, which will greatly reduce the investment appeal, though this is on a case-by-case basis rather than a standardised checklist.
Risk
The fund's diversification across a large number of companies and its holdings in medium-sized stocks helps to partially mitigate the risk of investing in very small companies.
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The information, data, analyses, and opinions contained herein (1) include the proprietary information of FundCalibre, (2) may not be copied or redistributed without prior permission, (3) do not constitute investment advice offered by FundCalibre, (4) are provided solely for informational purposes and therefore are not an offer to buy or sell a fund, and (5) are not warranted to be correct, complete, or accurate. FundCalibre shall not be responsible for any trading decisions, damages, or other losses resulting from, or related to, this information, data, analyses, or opinions or their use. The Elite Fund rating is subjective in nature and reflects FundCalibre’s current expectations of future events/behaviour as they relate to a particular fund. Because such events/behaviour may turn out to be different than expected, FundCalibre does not guarantee that a fund will perform in line with its FundCalibre benchmark. Likewise, the Elite Fund rating should not be seen as any sort of guarantee or assessment of the creditworthiness of a fund nor of its underlying securities and should not be used as the sole basis for making any investment decision. FundCalibre disclaims any responsibility for trading decisions, damages or other losses resulting from any use of the Elite Fund rating. All performance data, as well as fund size, OCF, AMC, annual income (historic), share price discount or premium, is sourced directly from FE Analytics, and will change periodically.