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WS Amati UK Listed Smaller Companies
An unconstrained portfolio, seeking structural UK growth businesses that can grow faster than the economy, WS Amati UK Listed Smaller Companies fund is managed by a highly experienced team of small cap specialists. The portfolio of 65-70 companies focuses on structural growth businesses, which the managers believe can add value in the under-researched small and mid-cap part of the market.
Previously called TB Amati UK Smaller Companies
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Dr Paul Jourdan, Lead Manager Dr. Paul Jourdan is a seasoned fund manager with a strong track record in small-cap investments. He co-founded Amati Global Investors in 2010 after leading Noble Fund Managers. Paul's career in fund management began in 1998 at Stewart Ivory, and he later managed funds at First State and Amati. He launched the Amati VCT funds and co-manages the Amati AIM IHT Portfolio Service. Before finance, he was a professional violinist with the City of Birmingham Symphony Orchestra. Paul is the CEO of Amati Global Investors and a founding trustee of Clean Trade, a charity.
David Stevenson, Deputy Manager David joined Amati in 2012 and co-manages the TB Amati UK Smaller Companies Fund, the Amati AIM VCT, and the Amati AIM IHT Portfolio Service. He was a co-founder of Cartesian Capital in 2005, managing various UK equity funds, and was previously an Assistant Director at SVM. David began his career at KPMG, where he qualified as a Chartered Accountant and later worked in corporate finance and private equity with Dunedin Fund Managers.
Scott McKenzie, Deputy Manager Scott joined Amati in April 2021 and has over 25 years of experience managing UK equity portfolios. His career began in Glasgow at Britannia IM in the early 90s, and he moved to London with Aviva Investors in 1999. He returned to Scotland in 2005 to join Martin Currie, where he stayed until 2009. After a period running his own private businesses, Scott joined Saracen Fund Managers in 2014, where he launched the TB Saracen UK Income Fund and managed the TB Saracen UK Alpha Fund, achieving top quartile rankings for both. At Amati, Scott manages the TB Amati UK Smaller Companies Fund, Amati AIM VCT, and the Amati AIM IHT Portfolio Service.
Dr Paul Jourdan, Lead Manager Dr. Paul Jourdan is a seasoned fund manager with a strong track record in small-cap investments. He co-founded Amati Global Investors in 2010 after leading Noble Fund Managers. Paul's career in fund management began in 1998 at Stewart Ivory, and he later managed funds at First State and Amati. He launched the Amati VCT funds and co-manages the Amati AIM IHT Portfolio Service. Before finance, he was a professional violinist with the City of Birmingham Symphony Orchestra. Paul is the CEO of Amati Global Investors and a founding trustee of Clean Trade, a charity.
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David Stevenson, Deputy Manager David joined Amati in 2012 and co-manages the TB Amati UK Smaller Companies Fund, the Amati AIM VCT, and the Amati AIM IHT Portfolio Service. He was a co-founder of Cartesian Capital in 2005, managing various UK equity funds, and was previously an Assistant Director at SVM. David began his career at KPMG, where he qualified as a Chartered Accountant and later worked in corporate finance and private equity with Dunedin Fund Managers.
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Scott McKenzie, Deputy Manager Scott joined Amati in April 2021 and has over 25 years of experience managing UK equity portfolios. His career began in Glasgow at Britannia IM in the early 90s, and he moved to London with Aviva Investors in 1999. He returned to Scotland in 2005 to join Martin Currie, where he stayed until 2009. After a period running his own private businesses, Scott joined Saracen Fund Managers in 2014, where he launched the TB Saracen UK Income Fund and managed the TB Saracen UK Alpha Fund, achieving top quartile rankings for both. At Amati, Scott manages the TB Amati UK Smaller Companies Fund, Amati AIM VCT, and the Amati AIM IHT Portfolio Service.
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Talking Factsheet
Quote from the Fund Manager
We believe that UK smaller companies can represent an outstanding asset class for long term investors. There are few better investments than businesses which can grow over the long term. Our job is to find them for you.
Dr Paul Jourdan
Lead Manager
Investment process
This is an unconstrained, stock-picking fund. It focuses on structural growth businesses, which the managers believe can add value in the under-researched small and mid-cap part of the market. The process begins by filtering out FTSE 100 and investment companies. The managers then look for companies with following attributes: barriers to entry; a competitive advantage; revenue visibility; pricing power; sustainable growth; an adequate balance sheet and the ability to finance growth; incentivised management with a good track record; and takeover potential.
‘Red Flags’ they avoid include: aggressive accounting; growth by acquisition; consistently reporting ‘exceptional’ items; poor profit to cash conversion; competitive threats from larger companies or new technologies; significant liabilities; lumpy income; and ‘fashion’ stocks.
Valuation is important, and the managers love to buy cheap businesses when they can, but they think it is much more important to find the right companies first. At least two of the three managers must agree on any investment decision but, in practice, any disagreements are worked out and addressed before any conclusion is reached.
The portfolio is under constant re-appraisal and stocks are sold when either the original investment premise no longer applies, there are better opportunities, the sector or macro outlook is deteriorating or there are signs of poor corporate governance.
Risk
The portfolio is well diversified, with around 65 to 70 stocks. Stocks are limited to maximum of a 5% position in the portfolio, after which they will be trimmed. Initial positions are 1% to 2% and this can expand to 3% or 4% over time. Sector positioning is largely a residual of the underlying stock selection. The fund does have a growth bias and, like any smaller companies fund, it can suffer heavy drawdowns during periods of market weakness. The fund’s volatility has varied over time but generally it has been similar to its average peer. All due diligence is subject to peer review.
ESG
ESG - Integrated
The managers understand that they needs to incorporate as many factors as possible into their decision making, and therefore integrate ESG analysis alongside financial decisions as a matter of course. Some of the ‘red flags’ they avoid in the process come under the umbrella of ESG issues.
On the environmental side, they will look at issues surrounding climate change and contamination, including within supply chains of companies. On social aspects, they will look at labour policies and customer treatment, as well as human rights, with the aim to avoid unequivocal social negatives, and on governance they will look at factors such as pay, conflicts of interest and corporate culture. On the latter, the managers will engage with firms where they identify issues, as governance has the largest impact in this end of the market.
While these factors alone do not ultimately determine the selection of investments made within the fund, they do form an integral part of the process of identifying the risks and opportunities associated with such investments.
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