Video: Introducing the LF Gresham House UK Micro Cap Fund

Lead Fund Manager Ken Wotton explains the investment strategy and objectives.

Lead Fund Manager Ken Wotton explains the investment strategy and objectives.


Past performance is not a reliable indicator of future performance.



The objective of the LF Gresham House UK Micro Cap Fund is to deliver attractive capital growth over the longer term and also a portfolio of high conviction stocks that’s designed to outperform and also to offer low correlation to other funds in the sector. Gresham House is a specialist alternative asset manager. Within the firm we have a Strategic Equity division focused on smaller companies and therefore particularly adept at finding under-researched and less well-known businesses that have the potential to grow over the longer term.

The Gresham House Micro Cap Fund has a number of distinguishing features. Firstly, we are smaller companies’ specialists which means that we are really focused at the smaller end of the small-cap universe, offering investors a different portfolio of companies where we have high conviction and where, as a result of that, the investors get low correlation relative to other funds in the sector.

We are also offering an investment process built up over twenty years using our private equity heritage and designed specifically to try and mitigate some of the risks inherent in investing in smaller companies. That means we invest in certain sectors and certain sectors we rule out, because of cyclicality or particular risks, and we are also very clear about the types of company we invest in which means we are investing, although in small companies, in companies that are profitable, cash generative and therefore robust and scalable over the long term.

Lastly, we’ve got a powerful network that we bring to bear on the investment process for this fund so leveraging the private equity heritage that we have got from the Livingbridge days and now complemented by Gresham House’s network we are able to identify companies, we are able to reference the people, reference the business models and really do deep due diligence on those companies which helps us to build high conviction in the portfolio and that means we are very confident that not only is it resilient but it can deliver good, attractive, long-term returns.

I think our clients like the Fund because it’s different. Within the UK smaller companies sector we are focused on micro caps which means that our portfolio of companies is different to our competitors and that means we have low correlation relative to other funds within the sector. I think they like the process which has been built up over twenty years and using the private equity heritage that we have is giving something that is repeatable and scalable and designed to mitigate the risks of investing in smaller companies. I think that’s been borne out with the risk-adjusted returns that the Fund has delivered over the longer term. And they like the consistency, this is the only UK Smaller Companies fund that’s delivered positive absolute returns within the sector over the last 10 years in every single year* and that consistency is something clients are really looking for.

*Source: FE Trustnet Analytics, UK Smaller Companies as at 31 December 2018.


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