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Liontrust Special Situations

Elite Rated by FundCalibre

The Liontrust Special Situations fund is a ‘best ideas’ portfolio, which encompasses any UK stocks regardless of size or sector, but typically will have a small and mid-cap bias. The managers have a distinctive investment process, which has been implemented with a high level of skill and consequently the fund has an impressive long-term track record.

Company Description

Liontrust Asset Management was founded in London in 1995 and prides itself on the freedom it allows its managers, who invest in their own portfolios. Listed on the Stock Exchange since 1999, company culture is at the forefront of their values. They were awarded the Elite Provider for Equities Rating.

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Fund Manager

Anthony Cross has managed the fund since inception in 2005, with Julian Fosh joining as co-manager in 2008. Cross has honed his investment process over a number of years, and in 1997 he published the Cross Report, which forms the blueprint of the fund’s investment strategy. The fund has won numerous awards, which demonstrates their standing within the industry.

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We run the fund using a distinct process, called Liontrust Economic Advantage. This seeks to identify companies with a durable competitive advantage that enables them to sustain a higher than average level of profitability for longer than expected. We are long-term holders of quality companies.

Julian Fosh - Fund Manager

The Investment Process

The managers look for firms with “intellectual capital” which includes strong distribution networks, recurring revenue streams and products with no obvious substitutes. Another important factor is how key employees are motivated, with the preference being through direct ownership of the company’s equity. The resulting portfolio consists of companies that can grow their earnings independently of the wider economy.

Risk

The fund has exhibited lower volatility than the UK stock market, which is consistent with the investment process and portfolio make-up. The managers’ preference for companies that can deliver earnings growth, despite economic headwinds, means the fund is likely to underperform strongly rising markets.

Our Opinion

If you consider the amount of time that Anthony Cross spent developing the investment process, combined with the skill of the managers and the fund’s track record, it’s easy to see why this fund is so well regarded in the UK All Companies sector. For investors wanting high-conviction, multi-cap exposure to the UK stock market, this fund ranks among the best.

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