Slater Growth

Slater Growth is a concentrated, high conviction fund that invests in UK equities. It has a strong bias towards smaller and medium-sized companies. The investment strategy is based on a 'growth at reasonable price' philosophy - looking for firms with strong competitive positions and solid cash generation, but not overpaying for them.

Our opinion

This is one of the best performing UK equity funds. Mark Slater has quietly delivered outstanding returns for many years, proving himself repeatedly as a top stock picker. The fund does have a style bias to small cap growth, so short-term periods of underperformance are inevitable, but overall performance has been excellent. One thing to keep an eye on is the fund’s size, which has grown substantially in recent years. This may make it tougher to deliver the same level of performance in the future, but nevertheless this remains a fund we rate very highly.

Fund manager

Mark Slater co-founded Slater Investments in 1994 with Ralph Baber. Prior to founding Slater investments Mark worked as a financial journalist with Analyst plc and Investor’s Chronicle. Mark also helped his father, Jim Slater, research and edit the famous investing book ‘The Zulu Principle’. Mark has served on the boards of four public companies. Mark has an MA in History from Cambridge University.

Mark SlaterFund manager

Investment process

The core of Mark’s investment philosophy is that markets are inefficient, and stocks are regularly mispriced. He believes that buying growth shares with a disciplined value filter is the best way to exploit these errors in the market.

Ideas come from the investment team, brokers, company meetings or newsletters. However, the main starting point is the team’s own internal quantitative screen, which narrows the universe to a more manageable short list, by looking for certain characteristics.

After creating a short list of companies, further detailed analysis is undertaken, before the final stage which will involve meeting the company management and competitor analysis. When buying into a stock, it tends to be for the long term.

The portfolio tends to invest in between 25-60 companies.

ESG

ESG - Limited
In September 2019, the company became a signatory to the United Nations-supported Principles for Responsible Investment. In 2020 the company increased the internal dedicated resources focusing on ESG. The fund does not have any hard exclusions, but the team believes ESG analysis is an important part of the risk process when analysing an investment. Mark has always taken corporate governance very seriously and is very aware of the potential risks of poor governance. Mark himself has also sat on the boards of a number of public companies. He and the team regularly meet and engage with firms in the portfolio. All shareholder votes cast on behalf of the fund are reviewed by the ESG team and are reported quarterly on the company’s website.

Risk

Although the fund is multi-cap, it will tend to invest in more small and medium firms, which tend to be more risky than larger companies. That said, the fund has tended to be less volatile than its average peer over time. Mark does not exceed 20% ownership of a company across all the portfolio to manage liquidity risk (the ability to sell positions quickly). The fund is stylistic, and it does usually struggle when growth goes out of favour.

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