Profiting from ‘peak ESG’ and UK tech winners

TL;DR

Anna McDonald, Manager of the MRT UK Smaller Companies Fund, discusses their investment strategy, which includes stocks in various sectors, and highlights the advantages of early-stage investments and ESG opportunities.

Transcript

welcome to the latest insider interview today i have anna mcdonald manager of the mrt uk smaller companies fund anna thank you very much for coming into the studio oh thank you for having me so please explain to us what the fund does what type of stocks do you invest in and what is your investable universe okay our investable universe is the numis ... Read More

Key Insights

• 🧡 The MRT UK Smaller Companies Fund invests in a diverse range of sectors, believing that opportunities can be found in all industries.
• 🥹 The fund's early-stage investment strategy provides an edge in discovering and nurturing potential future holdings.
• 🫢 Despite the wave of ESG investing, the fund found opportunities in oil and gas assets, which were viewed as unfavorable by some.
• 🇬🇧 British technology companies like GB Group, Crayonware, Dynomi, and Accesso demonstrate growth potential and have expanded their operations beyond the UK.
• 👻 The fund allows a year to sell stocks that enter the FTSE 100, and success stories like Autotrader are bittersweet, as new opportunities emerge.

Questions & Answers

Q: What is the investable universe for the MRT UK Smaller Companies Fund?

The investable universe includes stocks listed on the Numis Smaller Companies Benchmark and AIM Index, with additional holdings in non-benchmark stocks that have market caps above £1.8 billion.

Q: Does the fund focus on specific sectors?

The fund invests in companies from various sectors and does not restrict itself to specific industries. They believe that opportunities can be found in all sectors, including oil and gas, mining, technology, and biotech.

Q: How does the fund gain an edge in early-stage investments?

The fund manages the MRT AIM VCT, which allows them to identify and monitor companies at a super early stage, often before IPO. This gives them an advantage in discovering new technology companies and building relationships with them over time.

Q: How has the wave of ESG investing affected the fund's investment opportunities?

The increased focus on ESG investing has created investment opportunities for the fund. Some investment managers avoid certain companies, which allows the fund to find cheaper companies that others may overlook. Anna highlights cases where ESG ratings did not align with logic, and the fund benefited from investing in oil and gas assets amidst ESG concerns.

Summary & Key Takeaways

• The MRT UK Smaller Companies Fund invests in stocks listed on the Numis Smaller Companies Benchmark and AIM Index, with some holdings in non-benchmark stocks. They focus on early-stage investments and have a significant presence in the technology sector.

• The fund looks for growth opportunities in all sectors and avoids restricting themselves to specific industries. They believe that opportunities can be found everywhere, and they maintain a focus on companies with low asset base, high intellectual capital, and the potential for long-term success.

• Anna highlights some successful investments, such as i3 Energy, which benefited from the demand for oil and gas despite the wave of ESG investing. She also mentions other British technology companies like GB Group, Crayonware, Dynomi, and Accesso, which have demonstrated growth potential.