Liontrust Special Situations

Liontrust Special Situations fund is a 'best ideas' portfolio that may encompass any UK company regardless of size or sector, but typically will have a bias towards smaller and medium-sized firms. The managers have a distinct investment process, which has been implemented with a high level of skill and consequently over many years. Subsequently, the fund has an impressive long-term track record.

Our opinion

If you consider the amount of time that Anthony has spent developing the investment process, combined with the skill of the managers and the track record of the Liontrust Special Situations fund it's easy to see why it is so well regarded by those who invest in the UK. For investors wanting high-conviction, multi-cap exposure to the UK stock market, this fund ranks among the best.

Fund manager

Anthony Cross has managed the Liontrust Special Situations fund since inception in 2005, with Julian Fosh joining as co-manager in 2008. Anthony has honed his investment process over a number of years and, in 1997, he published the Cross Report, which forms the blueprint of the fund's investment strategy. The fund has won numerous awards.

In May 2023, Victoria Stevens and Matthew Tonge joined Anthony and Julian as fund managers. Victoria and Matthew have managed the £160m Liontrust UK Micro Cap fund since its launch in March 2016. They have also worked as fund managers of the £1.1bn Liontrust UK Smaller Companies fund since 2016, alongside Anthony and Julian.

We are long-term holders of quality companies.

Anthony CrossFund manager

Investment process

Liontrust Special Situations’s investment philosophy is based around finding companies with hidden intangible strengths. These are often difficult to quantify, but are very meaningful in protecting a company’s competitive position: every stock in the portfolio must have; intellectual property, a strong distribution network or recurring revenues. Another important factor is how key company employees are motivated, with the preference being for direct ownership of the firm's equity. The resulting portfolio consists of businesses that can grow their earnings, independently of the wider economy.

ESG

ESG - Limited  

The ‘Economic Advantage’ process employed by this fund looks for those businesses with distinctive, hard-to-replicate intangible assets. This does include the analysis of ESG factors, but more to identify the risks and use to help with position sizing, rather than as a screen. As such, the portfolio can invest in firms from all sectors and industries, though those with poor ESG credentials will be looked on less favourably than others, all other things being equal.

Risk

The fund is typically very different to the UK stock market, with a significant underweight to large companies. Instead, much of the portfolio has been traditionally invested in small and mid-caps. It may also have large sector underweight or overweight positions. Despite these factors, the fund has actually exhibited lower volatility than the UK stock market, due to Anthony's well-honed investment process.

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