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Time to pull the trigger on battered UK?
This article first appeared on professionalparaplanner.com on 2nd March, 2023 It seems whichever...
JOHCM UK Dynamic
Alex Savvides has managed the JOHCM UK Dynamic fund for more than a decade. He has a contrarian approach, looking for companies going through a period of change. He will use conviction when others are uncertain to deliver long-term growth returns. Unusually for a fund focusing on capital growth, it produces a naturally good level of dividend yield. This fund has a performance fee.
Our opinion
Alex is a manager with strong opinions and is not afraid to be different. His willingness to have conviction in periods of uncertainty for a stock means JOHCM UK Dynamic will look and behave differently to the market, something reflected in the excellent long-term returns. In such a competitive space as the UK All Companies sector, this is a welcome approach.
Company description
JO Hambro Capital Management (JOHCM) was established in 2001. It prides itself on removing bureaucracy and taking an entrepreneurial approach. Funds are run as separate entities and there are no house views. Each fund manager has their own unique franchise, receiving a performance fee, which aligns them with investors. The group was awarded the Elite Equities Provider rating in both 2015 and 2017.
Fund manager
Alex joined JOHCM in March 2003, originally as an assistant fund manager. He subsequently developed and launched the JOHCM UK Dynamic fund in June 2008, becoming JOHCM’s first internally developed fund manager to launch a new and 'home grown' investment process.
Prior to joining JOHCM, Alex worked as a research associate at Astaire & Partners and held sale roles at Teather & Greenwood and Numis Securities, all stockbroking firms. Alex has a degree in Politics from the University of Nottingham and is a Fellow of the Securities Institute. He also holds the Securities Institute Diploma.
We back positive change within businesses with good market positions.
Alex SavvidesFund manager
Investment process
Alex invests in UK companies which are undergoing substantial positive change that is not recognised in the current share price. Alex has strict investment disciplines: each holding in the portfolio must pay a dividend, and the companies will be well established, in structurally sound markets. He is free to choose across the market cap spectrum, meaning the portfolio can invest in companies of any size and its bias towards any particular market segment will vary over time. The portfolio is likely to be concentrated, typically holding equity interests in between 35 and 50 different companies.
ESG
ESG - Limited
Alex has a different approach to analysing ESG with this fund, treating it as an holistic concept rather than a strict set of criteria. He uses a proprietary ‘mindset evaluation’ tool which aims to build a framework around a business’ financials, and how it behaves including around social and environmental practices. This is used to support investment decisions, rather than inspire them, and also highlights areas to engage with management teams. This tool aims to assess how firms are thinking about their own sustainability and whether they are taking a forward-looking approach, rather than using traditional metrics to simply put certain industries and companies into predefined buckets.
Risk
Alex has substantial risk controls built into the process at each stage. The risk of what could happen to a stock as well as its wider sector is factored into the analysis before an investment is made. Alex will also look at the impact of each new investment on the overall risk of the portfolio. JOHCM has an in-house quantitative system to provide real-time risk assessment as a sanity check to the portfolio.
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