180. Our companies are not the most exciting – but they excite us

JOHCM UK Dynamic fund manager Alex Savvides says although the companies he invests in may not appear the most exciting – the potential for change and business transformation does offer exciting returns. He also explains why his fund is much more than just a value-orientated vehicle and what he looks for from management teams he hopes to invest with. Alex also talks us through the rampant M&A activity we’ve seen in the past year or so, and how he and his team had to fight for fair value when some of their holdings were bid for. He also tells us why 3i and Electrocomponents are some of the biggest turnaround stories in his career as well as giving us insight on a couple of holdings he is just as bullish on for the future.
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JOHCM UK Dynamic fund manager Alex Savvides is a contrarian who targets companies undergoing a period of change – taking advantage of this transition to deliver long-term growth returns. When building a portfolio of 35-50 holdings, Alex looks specifically for companies which are well established, in a structurally sound market and pay a dividend. Having built up an excellent long-term track record, Alex’s process of investing in UK companies which are undergoing substantive positive changes – which has not been recognised in the share price – has shown itself to be successful in numerous market conditions.

What’s covered in this episode:

  • Why the fund is much more than just a value-orientated vehicle
  • Valuation did not disappear, it will always matter
  • Our companies are not the most exciting – but they excite us
  • How the business turnaround in energy supplier Centrica is the perfect example of how you can make exciting returns
  • The importance of the “say do ratio” when assessing new management teams
  • Why 3i and Electrocomponents are the best turnaround stories of Alex’s career – and a few he is bullish on in the future
  • Why the strong levels of M&A activity seen in the past 18 months are unlikely to continue going forwards
  • Why he was not happy with certain bids for companies in his fund and having to fight for fair value for long-term shareholders
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