Trustnet Magazine Issue 48 FEBRUARY 2019 | Page 32

In focus
[ FUND ]
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FE Alpha Manager Paul Jourdan aims to invest early on in high-quality
growth businesses that occupy “prime real estate” on the internet
FE TRUSTNET
on the internet, it tends to mean you
have an unregulated monopoly.”
However, he warned there is a
danger these companies can exploit
such positions too hard and distance
themselves from their customer base,
forcing them to seek out alternatives.
The £201m fund has ongoing
charges of 0.94 per cent.
FACT BOX
MANAGERS: Paul Jourdan, David Stevenson & Anna Wilson / LAUNCHED: 18/12/1998
FUND SIZE: £201.2m / OCF: 0.94%
FE CROWN RATING
PERFORMANCE OF FUND VS SECTOR AND INDEX OVER 10YRS
TB Amati UK Smaller Numis Smaller IA UK Smaller
Companies (578.64%) Companies + AIM ex Companies
ICs (271.93%) (334.75%)
700%
600%
500%
400%
300%
200%
100%
0%
11
-100%
cap space whose current growth
rates – admittedly from a much
lower level – can compete with their
international peers.
This is one reason that Jourdan said
his team’s bottom-up stockpicking
strategy has outperformed over the
past decade.
The fund is up 578.64 per cent over
this time compared with 334.75
per cent from its IA UK Smaller
Companies sector and 271.93 per cent
from the Numis Smaller Companies +
AIM ex ICs index.
“I think this has been possible because
we have been in a particular phase of
an industrial revolution, based around
digital technology,” said Jourdan.
“A lot of the companies that we
look at and like are those which are
able to deploy digital technology
more effectively in a particular
industrial niche, where there is a
clear opportunity and real domain
expertise in the management team.”
W
hile US blue-chip names
such as Apple and Amazon
are the publicly recognisable
face of the technology industry, it is
often further down the market cap scale
where the greatest returns can be made
over the long term.
This is one of the defining themes
of the TB Amati UK Smaller
Companies fund, headed up by FE
Alpha Manager Paul Jourdan, David
Stevenson and Anna Wilson.
“We have a sense that if you can find
an opportunity to invest early on in a
high-quality growth business, there
are very few investments you can
make that will be anywhere as good as
that,” Jourdan said.
“The beauty of that type of
investment is that you can hang on to
it for a long time and it will carry on
doing well for you.”
Although the UK market has little in
the way of global technology leaders,
it contains many names in the small-
TB Amati UK Smaller
Companies
The manager said he prefers
companies with dominant positions
in their respective markets and
occupiers of “prime real estate” on
the internet, such as Auto Trader.
“It’s prime real estate because it
can’t be replicated and there’s not
very much of it,” added Jourdan.
“Where you have prime real estate
Source: FE Analytics
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