Probably better asking an octopus

When a boy of the Algonquin people of Quebec reached puberty, they were taken to a secluded area and given a powerful and extremely hallucinogenic poison called Wysoccan, in the hope that this would purge their young minds of any memory of their childhood and leave them with a clean slate to face the years ahead. Some were so badly stricken by the drug that they would also lose the ability to speak and be unable to recognise members of their own family. Having spent most of the last fortnight

Brown Advisory US Smaller Companies

BASC’s manager believes low valuations may offer a starting point for long-term outperformance…

Delivering on its promise

Since the appointment of Brown Advisory as manager in April 2021, BASC has outperformed the Russel 2000 by c .200bps per annum. We attribute this performance to the team’s consistent commitment to its strategy of owing a fairly concentrated (c.75 investees) but diversified portfolio of durable growth companies. We remind investors that the fund’s high active share (>90%) and avoidance of more cyclical companies can lead to short term divergence from the fund’s comparator index (the Russell 2000)

Brown Advisory US Smaller Companies

BASC: small cap quality growth in the world’s largest equity market...

Undiscovered quality growth

Since Chris Berrier of Brown Advisory started managing BASC in April 2021, the fund has underperformed (-1.8% versus -1.0%) the Russell 2000 TR Index and has outperformed in 55% of weekly periods. The team summarise their approach as seeking long term compounders via their 3G (Growth, Governance and Go-to-Market) process. Their aim is to invest in a company at a point of inflection and to own it throughout the time it takes for the market to recognise the change. Trading on a 10% discount to NAV

Brown Advisory US Smaller Companies

Brown Advisory US Smaller Companies (BASC) offers access to a portfolio of high-quality growth companies in the US small cap market, which brings exposure to the long-term growth potential in the dynamic US economy.

It’s the end of the world as we know it

We examine five potential themes for investors seeking long-term returns in a troubled and uncertain world

Bargain hunt

We survey the discount opportunities in the market and update on the performance of our Discounted Opportunities Portfolio

Brown Advisory US Smaller Companies - Review

Brown Advisory US Smaller Companies (BASC) has made a strong start to its life under the new portfolio manager. Chris Berrier of Brown Advisory was named the new manager in late 2020, and management responsibilities transitioned on 1 April 2021 following the retirement of Jupiter’s Robert Siddles. As we discuss under the Performance section, the trust has outperformed under the new strategy, despite choppy markets. Chris’s strategy uses bottom-up analysis to select the best long-term growth opp

How Do You Like Them Apples

Very few investors need to be reminded that the US market has hugely outperformed the rest of the world in the historic bull market following the Great Financial Crisis. Unfortunately, the discretionary fund managers that manage the portfolios of British retail investors need reminding even less, having been as a group systematically underweight in the US in their equity allocations. In the below chart, we have plotted the average US weighting in the equity portion of UK multi-asset funds in the

Bargains galore

We last updated our discounted opportunities portfolio in July. Since then markets have been grinding higher but discounts have not moved – and perhaps slightly widened. We think readers will largely agree that it is hard to have conviction about the direction of markets and leadership at the moment, which may explain the static picture regarding discounts. At a directional level, the easy gains in the recovery have been made, and government support schemes have still to be wound down, creating

Jupiter US Smaller Companies - Overview

Jupiter US Smaller Companies (JUS) will be renamed Brown Advisory US Smaller Companies (BASC) in mid-May, subject to shareholder approval, after the mandate was taken over by the new manager on 1 April 2021. Chris Berrier heads up the Brown Advisory US Small Cap Growth team, and is the new lead manager. He has run the same strategy in the open-ended space since 2006, which has outperformed both the small cap Russell 2000 index and the Russell 2000 Growth. As discussed in performance, the Brown A

FAANGs for the memories

Large-cap technology stocks have dominated global markets in recent years, especially in the US where the FAANGs (Facebook, Amazon, Apple, Netflix and Alphabet) have reigned supreme. Combined, the FAANGs and Microsoft currently make up 12% of global equity markets while also having been amongst the best-performing companies globally. Yet we think the future doesn’t look as bright for these giants, with a series of antitrust suits on the horizon and declining tailwinds from COVID-19 lockdowns. Th

Over the pond

From the beginning of April, Brown Advisory (Brown) is set to take over the management of Jupiter US Smaller Companies (JUS), following the retirement of the trust’s long-standing manager, Robert Siddles. Back in December, when JUS’s board announced its intention to appoint Brown, it said that the long and impressive track record of the new manager’s US small-cap growth strategy, with annualised returns of 14.5% over 10 years, stood out in a highly competitive field. It also said that it believe

Over the pond

From the beginning of April, Brown Advisory (Brown) is set to take over the management of Jupiter US Smaller Companies (JUS), following the retirement of the trust’s long-standing manager, Robert Siddles. Back in December, when JUS’s board announced its intention to appoint Brown, it said that the long and impressive track record of the new manager’s US small-cap growth strategy, with annualised returns of 14.5% over 10 years, stood out in a highly competitive field. It also said that it believe

Morning Note – 22 April 2024

Benefits of scale set to materialise

Frenkel Topping - Resilient with strong growth potential

FY 2023 was a challenging year for Frenkel with higher interest rates encouraging clients to place money into lower margin money market funds. Despite this, sales grew +32% (supported by recurring revenue +9% and +51% in non-recurring), EBIT margins remained strong at 22% and adj. EPS grew +17% (taking into account the higher number of shares). FY 2024 has seen a solid start to transactional business and there is a strong pipeline of new FUM opportunities both of which support further growth. Wi

S&U - PBT ahead, encouraging volume trends

S&U reported FY24 PBT of £33.6m, down from £41.4m in FY23 on higher funding and regulatory costs and higher impairments in Advantage in H2. PBT was 2% ahead of our forecast as stronger revenues – up 12% to £115.4m – and better costs offset higher-than-expected impairments. Net receivables grew to a record at both Advantage and Aspen and management noted particular strength in Q4 and a good trading environment in the current year. Having absorbed a significant rise in funding cost as well as addi

Hardman & Co Insight: 2023 was an annus horribilis for Quoted UK Infrastructure and Renewable Energy

The focus of Hardman & Co Research is on the nine quoted Infrastructure Investment Companies (IICs) and on the 22 Renewable Energy Infrastructure Funds (REIFs): the stocks analysed are all members of the Association of Investment Companies (AIC). We are updating our publication of January 2023, assessing both the lacklustre share price performances during 2023 and the key issues, including interest rates, inflation and power prices. As a 31-strong group, its combined market capitalisation is no

Foresight Solar Fund - Termination of coverage

Edison Investment Research is terminating coverage on ABC Arbitrage (ABCA), paragon (PGN), Foresight Solar Fund (FSFL), Kendrion (KENDR), Lithium Power International (LPI), Triple Point Energy Transition (TENT), 4iG (4IG), e-therapeutics (ETX), Pharnext (ALPHA) and Shield Therapeutics (STX). Please note you should no longer rely on any previous research or estimates for this company. All forecasts should now be considered redundant. Previously published reports can still be accessed via our web

LIBERUM: PayPoint: On track for £100m of EBITDA in FY 26

Hybridan Small Cap Feast - 22 April 2024

22nd April 2024 * A corporate client of Hybridan LLP ** Arranged by type of listing and date of announcement *** Alphabetically arranged **** Potential means Intention to Float (ITF) has been announced Dish of the day Admissions: Delistings: What’s baking in the oven? ** Potential**** Initial Public Offerings: Reverse Takeovers: 16 April 2024: Electric Guitar (ELEG.L) Concurrent with its Admission to trading on AIM, Electric Guitar is proposing to acquire the entire issued share capital of 3radi

LIBERUM: Speedy Hire: Weakness in FY 24 but recovery in FY 25

Regional REIT - Performing as expected ahead of refinancing

In a challenging market, Regional REIT’s (RGL’s) FY23 operational and financial performance was robust, in line with expectations and previous guidance. Investor focus remains on the company’s loan to value (LTV) reduction and bond refinancing plans, explored in detail in our previous note and RGL will provide an update on this in due course.

The Hardman & Co Monthly: April 2024

Feature article: Steady as she goes, but could be better: A review of investment company liquidity since 2016 Liquidity is the lifeblood of equity markets. The measurement of liquid asset availability to a market or company is a way of gauging a market’s health. This article builds on our previous work, which analysed the liquidity data for non-financial trading companies, by applying the same analytical techniques to the investment companies (IC) space. We analyse liquidity for ICs as a whol

Foxtons Group (FOXT LN) - 1Q24 IMS shows real momentum

Foxtons Group plc first quarter revenue rose 9% to £35.7m (1Q23: £32.9m) with growth delivered across all business segments. Trading is in line with management's expectations.

Morning Note – 29 February 2024

Jupiter Green

Hardman & Co Insight - Asset managers had a poor 2022

Asset managers had a poor 2022: the S&P Composite 1500 Asset Management Index was down 22% and, according to the Investment Company Institute (ICI), worldwide mutual funds fell by 20%, from $76tr to $60tr. When bond and equity markets fall, the results are unlikely to be pretty: with revenues trending down and multiples contracting, there is a double whammy to contend with. So how do valuations shape up now, after a bullish start to the new year? The first chart is my favourite chart of asset m