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WS Gresham House UK Multi Cap Income
This is a concentrated multi-cap income fund with a bias towards smaller companies. Under manager Ken Wotton, who also runs the highly successful Gresham House UK Micro Cap fund, the WS Gresham House UK Multi Cap Income targets an initial yield of 4%.
Most recently, LF Gresham House UK Multi Cap Income fund. Previously LF Livingbridge UK Multi Cap Income fund.
Our opinion
This fund has a strong process and benefits from Ken's unrivalled expertise in the small-cap space. We think the fund can deliver for investors over the long-term in the same way WS Gresham House UK Micro Cap fund has. This makes the fund a compelling choice for those looking for a combination of capital appreciation and an attractively growing income.Company description
Gresham House plc is an AIM quoted specialist alternative asset manager providing funds, direct investments and tailored investment solutions. The company's expertise includes strategic public equity, private equity (private assets), forestry, renewable energy, housing and infrastructure. It aims to deliver sustainable financial returns and is committed to building long-term partnerships with clients to help them achieve their financial goals. Gresham House bought Livingbridge in December 2018. The Livingbridge team are known for running the successful Baronsmead venture capital trust range.
Fund manager
Ken graduated from the University of Oxford and began his career as a chartered accountant at KPMG. He spent five years working as a sell-side analyst for Commerzbank before moving to Evolution, were he covered small-cap telecoms and technology. Ken joined Livingbridge, now Gresham House, in 2007 and heads up the company's quoted investment activity. He is supported by co-manager Brendan Gulston who joined in 2015.
The variety and dynamism of genuinely smaller companies always keeps this job interesting. It’s exciting to back entrepreneurs and help them to grow their businesses.
Ken WottonFund manager
Investment process
Gresham House deliberately ignores parts of the market, such as oil and gas, mining and property. Instead, the firm concentrates its resources on areas where it thinks it has an edge.
Stocks are initially screened for financial strength and cash flow. The manager then undertakes detailed analysis and makes use of Gresham House's internal resources. Ken focuses on the quality of management teams and their alignment with investors. He also prefers simple businesses with a clear strategy and a large market opportunity. Although WS Gresham House UK Multi Cap Income invests in companies of all sizes, the expectation is that the majority of stocks in the portfolio will be at the smaller end of the market spectrum.
ESG
ESG - Integrated
Gresham House as a business has a commitment to make sustainable investment considerations integral to its approach. This entails exclusions of certain areas of the market, such as oil and gas and mining. These exclusions are a result of both the broader investment philosophy and a sustainable investment framework which enables the company to actively monitor a broad range of issues. Beyond this, Ken looks at all three ESG factors proactively, with an emphasis on governance. During the analysis, Ken will look at inputs such as a company’s carbon emissions, waste management, supply chains and employment safety to identify potential material risks to the business. For governance issues, Ken will look at factors such as board composition, company culture and remuneration policy. Within smaller companies, to which the fund has a bias, management teams have a bigger impact on the fortunes of a business, so identifying issues here is integral to the successful application of ESG analysis in the process.
Risk
WS Gresham House UK Multi Cap Income typically holds between 40 and 70 positions. The fund invests heavily in small and micro-caps, which can be volatile and illiquid. These risks are mitigated in two ways: firstly, the fund generally avoids cyclical stocks and sectors which are tied to the economic cycle; secondly, the fund will hold a small component of large-cap stocks which provide better liquidity.
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