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SVM UK Opportunities
SVM UK Opportunities is a unique and pragmatic stock-pickers fund. The team has the flexibility to invest across the market cap spectrum in the UK and, while the fund has a value tilt, it is not beholden to a fundamentalist value philosophy - the manager will invest in growth stocks where he sees opportunity.
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Neil Veitch, Lead Manager Neil joined SVM in 2006 and serves on the Board of Directors. He manages the SVM UK Opportunities Fund and the SVM All Europe SRI Fund, both since 2006, and the SVM World Equity Fund since its launch in 2010. Before SVM, Neil managed UK mid and small-cap investments at Kempen Capital Management and handled pan-European mandates.
Craig Jeruzal, Deputy Manager Craig is Deputy Manager on the Fund and has been with SVM since 2006. He is an experienced UK equity analyst, having previously worked at Kempen Capital Management as part of their pan-European equity team, focusing on company research.
Neil Veitch, Lead Manager Neil joined SVM in 2006 and serves on the Board of Directors. He manages the SVM UK Opportunities Fund and the SVM All Europe SRI Fund, both since 2006, and the SVM World Equity Fund since its launch in 2010. Before SVM, Neil managed UK mid and small-cap investments at Kempen Capital Management and handled pan-European mandates.
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Investment process
This is a go-anywhere fund, with a relentless focus on individual company research. The manager is very disciplined on valuation and the majority of the portfolio is usually made up of value holdings. However, Neil is not beholden to a rigid value philosophy, and he will invest in growth stocks when opportunities arise. The fund has three different buckets: value (40-80%) priced below the market; growth at reasonable price (10-40%) misunderstood growth; and high growth (0-10%). Neil will invest in high or low growth. What matters is the valuation and the net present value of the business.
Ideas come from a variety of sources including company meetings, screening and broker research. The team uses four different screens which can be used in isolation or used together and does not rely on sell-side research. Price targets are set for all holdings ensuring there is sell discipline. As a stock approaches a price target, the manager will sell the position and recycle the capital into higher conviction ideas.
The fund is long-only but has the ability to short individual stocks in rare cases. The manager takes a long-term approach with investments and targets outperformance over 5 years.
Diversification is important and the fund is broken down into seven baskets of stocks, with different underlying economic exposures. This allows Neil to easily see where the risk is being taken at a sector level and he can adjust accordingly.
Risk
SVM does not use stop losses but a real time monitoring spreadsheet will alert the manager to any large changes in individual positions. The fund is reasonably concentrated in 40-60 holdings so there will be stock-specific risk. Each position will usually be initiated at between 1.5% and 3% with an absolute maximum position size of 7%. The top ten positions usually make up around half the portfolio.
ESG
ESG - Limited
Responsible investing is an important aspect of SVM and the service it offers to investors when managing funds. To this end, it will engage companies it owns where it believes it sees issues, with a focus on the areas where it believes its voice will have most impact. The primary objective of this fund, however, is capital appreciation. To achieve this, Neil has a go-anywhere approach meaning he doesn’t wish to rule out potential opportunities based on notional ethical standards. Obviously, Neil will not invest in stocks where he thinks risks posed by ESG will undermine the future of the company, but there aren’t strict parameters on what type of stocks he can or can’t own.
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