Asset Manager Overview
Launched in 1995, Liontrust is a fund management company headquartered in London. The group currently has nine fund management teams, each with a distinct investment approach and running money independently, with support provided by Liontrust's marketing, sales, dealing, compliance and operations functions.
Fund Manager/Team Overview
Anthony Cross commenced his investment management career at Schroders in 1991, where he initially worked as an equity analyst before moving over to the Smaller Companies team. Mr Cross then joined Liontrust in 1997, developing this fund's investment strategy and underlying process, which was first used in a UK smaller companies vehicle from 1998 onwards. He has run this fund, which uses the same philosophy and process but invests across the market capitalisation range, since its launch in 2005. At the end of December 2024, co-manager and long time colleague Julian Fosh who joined Liontrust in 2008 retired after a prelonged period of absence. Sucession planning has long been a focus here and in 2015, the managers were joined by Victoria Stevens, who came from specialist broking firm finnCap and Matthew Tonge, who has been with Liontrust since 2003, having previously been haed of the firm's trading desk. More recently, the team has expanded through the hire of Alex Wedge, who joined in 2020, Natalie Bell who joined in 2022 from the Stewardship team within Liontrust and in May 2024 Alexander Game joined from Unicorn where he was involved in managing small and all cap portfolios.
Investment Philosophy & Process Overview
The team's investment philosophy is based on the belief that companies which have a durable competitive edge will generate above average returns over the long term. For a company to have such an advantage, it needs to have one of the following three characteristics; intellectual property, a strong distribution network or a recurring revenue stream. These factors build the idea of a company having intangible assets, which may not be evident on its balance sheet but are vital components of its competitive advantage, as they are very difficult for others to replicate.
Often these factors tend to be self-reinforcing, thus generating sustainable growth and giving the business staying power. As a result, profits can remain at abnormally high levels for extended periods. Having identified promising companies, the team then analyses a firm's accounts to examine if its favourable competitive positioning has been successfully converted into above average profit generation. Companies that have no history of financial productivity are not pursued, whilst the team will also avoid companies that are exposed to factors out of their control, such as regulation which leads to the avoidance of banks, or commodity prices resulting in a nill weighting in basic materials. The managers will exit companies that either lose their edge or that fail to translate it into superior returns. The team manage a number of UK funds with a shared investment philosophy. Portfolio construction for UK Growth is somewhat more index aware especially compared to their Special Situations fund, and so despite being able to be zero weighted in stocks that do not meet their investment criteria, they are limited to a 3% relative overweight position at the stock level. Overall the portfolio will be made up of between 40-60 larger companies, athough there can also be up to 10% in smaller companies.
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