Sanlam Global Artificial Intelligence
This fund 'eats its own cooking' using an artificial intelligence (AI) system to help find companies whose business models are aligned to benefit from this growing theme. The fund is unconstrained in that it can invest in businesses of almost any size and in more than just technology stalwarts; around half of the portfolio can be found in the healthcare and consumer-related sectors.
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Chris is Head of Growth Equities at Sanlam Investments UK and co-manages several funds, including the Sanlam Global Artificial Intelligence Fund and the Sanlam North American Fund. He joined Sanlam in January 2021, bringing experience from Smith & Williamson, where he managed the North American Equity and Mid Ocean World Investment Funds. Chris also has a background in managing US and technology equities at Pictet Asset Management, Schroders, and Aegon Asset Management. He holds a BA (Hons) in Music from the University of Nottingham, an MMus from the University of Glasgow, an MBA from the University of Edinburgh, and the IMC.
Tim is co-manager of the Sanlam Global Artificial Intelligence Fund and the Sanlam North American Fund. He joined Sanlam in January 2021, after managing the North American Equity and Mid Ocean World Investment Funds at Smith & Williamson, where he worked from May 2015. Before Smith & Williamson, Tim managed Global and US equities at Pictet Asset Management, global equities at Henderson Global Investors, and US equities at Fleming Investment Management. He graduated from the University of Bath with a BSc (Hons) in Social Sciences, History, and Philosophy.
Chris is Head of Growth Equities at Sanlam Investments UK and co-manages several funds, including the Sanlam Global Artificial Intelligence Fund and the Sanlam North American Fund. He joined Sanlam in January 2021, bringing experience from Smith & Williamson, where he managed the North American Equity and Mid Ocean World Investment Funds. Chris also has a background in managing US and technology equities at Pictet Asset Management, Schroders, and Aegon Asset Management. He holds a BA (Hons) in Music from the University of Nottingham, an MMus from the University of Glasgow, an MBA from the University of Edinburgh, and the IMC.
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Company Description
Headquartered in South Africa, Sanlam Group dates back to 1918 as a life insurance company and now offers a range of financial services. Under the Sanlam Investment division, the company purchased FOUR Capital Partners in 2014 to form an investment boutique managing UK, European, US and global equities, as well as multi-asset. It subsequently purchased a series of funds and personnel from Smith & Williamson, the transfer of which completed in 2021.
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Quote from the Fund Manager
We are at the start of the adoption of Artificial Intelligence. Companies able to capture the opportunity will enjoy considerable competitive advantages, across diverse sectors and markets.
Chris Ford
Co-Manager
Investment process
Chris uses a powerful system to analyse thousands of financial statements for keywords and phrases that indicate companies are incorporating AI into the future growth of their business model. This system also uses language translation to remove any country bias.
Initial screens will then remove stocks under £250m market capitalisation, which leaves an investable universe of around 500 stocks. These companies will not just be technology companies: they can be from any sector, but must have a core element of their future growth based around the benefits of implementing AI.
A more traditional fundamental analysis approach then follows: Chris and his team of analysts test the companies to ensure revenues are derived from AI. This is done by looking at five factors; the use of algorithms, sensing, AI application, high-powered computing, and data. More standard company fundamentals such as cash generation and balance sheet strength are also crucial considerations.
Risk
While Chris is valuation conscious, there remains a bias towards the growth style of investment, which can go in and out of style. However, the spread of stocks from different sectors and diversified revenue streams, make it more diversified than a pure technology fund. The portfolio is concentrated at around 35 names and can invest across the market cap spectrum, meaning there can be relatively large positions in smaller companies, increasing the level of risk.
ESG
ESG - Integrated
All Sanlam funds integrate ESG factors into their research and decision-making processes. Their approach is fund manager-led and the investment team also has access to third-party data providers that report companies’ underlying ESG risks. These are incorporated alongside the managers’ own fundamental bottom-up analysis to assess potential risks to performance or ensure they are investing in a company that displays characteristics associated with responsible financial practices. The fund’s investment process identifies and focuses on a universe of transformative companies that address the world’s most pressing needs.
Sanlam is finding that, increasingly, these themes are dominated by Environmental and Social concerns. It believes that understanding corporate culture is of paramount importance in making successful investments, and invests a lot of time in looking to understand the governance and incentive structures within its portfolio companies. Sanlam engages with the management teams of the companies in which it invests, votes proxies, and is partnering to develop AI tools to help deliver greater ESG oversight.
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