For financial professionals in the UK

Fund Manager May Commentary – Lowland Investment Company

Laura Foll, CFA | Janus Henderson Investors
Laura Foll, CFA

Laura Foll, CFA

Portfolio Manager

James Henderson

James Henderson

Portfolio Manager

22 Jun 2021
2 minute read

During May the portfolio received two takeover approaches from private equity – property developer and owner St Modwen Properties (approached by Blackstone) and aerospace components supplier Senior (approached by Lone Star). This heightened interest by private equity reflects a broader trend in the UK market, with a number of companies being approached across a range of sectors. In our view this private equity interest provides demonstrable evidence of the valuation discount currently attributed to UK equities relative to overseas peers.

May was an active month for the portfolio and new positions were taken in DCC, Devro and Jupiter Fund Management. In the case of DCC, which distributes (among other products) liquified petroleum gas and heating oil for a range of commercial and domestic customers, the de-rating of the shares in recent years, in our view, fails to reflect the history of attractive returns on capital and earnings growth. In the case of Devro, which makes collagen casing products (for sausages), the company is one of two global market leaders. Under a new management team debt has been reduced, and organic growth has shown recent signs of improvement.

We continue to be encouraged by recent trading updates from companies held in the portfolio, as well as supportive lead indicators such as job vacancy levels. Trading updates are demonstrating strength across a broad range of end markets including domestic RMI spend (benefitting companies such as Epwin), US construction activity (benefitting companies such as Somero Enterprises) and a recovery in physical retail spending (benefitting companies such as Marks & Spencer). If there were to be a cautionary note, it would be that we continue to hear of widespread input cost pressures as well as supply outages in some areas.

These are the views of the author at the time of publication and may differ from the views of other individuals/teams at Janus Henderson Investors. References made to individual securities do not constitute a recommendation to buy, sell or hold any security, investment strategy or market sector, and should not be assumed to be profitable. Janus Henderson Investors, its affiliated advisor, or its employees, may have a position in the securities mentioned.


Past performance does not predict future returns. The value of an investment and the income from it can fall as well as rise and you may not get back the amount originally invested.


The information in this article does not qualify as an investment recommendation.


Marketing Communication.






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Please read the following important information regarding funds related to this article.

Before investing in an investment trust referred to in this document, you should satisfy yourself as to its suitability and the risks involved, you may wish to consult a financial adviser. This is a marketing communication. Please refer to the AIFMD Disclosure document and Annual Report of the AIF before making any final investment decisions.
    Specific risks
  • If a Company's portfolio is concentrated towards a particular country or geographical region, the investment carries greater risk than a portfolio that is diversified across more countries.
  • Some of the investments in this portfolio are in smaller company shares. They may be more difficult to buy and sell, and their share prices may fluctuate more than those of larger companies.
  • This Company is suitable to be used as one component of several within a diversified investment portfolio. Investors should consider carefully the proportion of their portfolio invested in this Company.
  • Active management techniques that have worked well in normal market conditions could prove ineffective or negative for performance at other times.
  • The Company could lose money if a counterparty with which it trades becomes unwilling or unable to meet its obligations to the Company.
  • Shares can lose value rapidly, and typically involve higher risks than bonds or money market instruments. The value of your investment may fall as a result.
  • The return on your investment is directly related to the prevailing market price of the Company's shares, which will trade at a varying discount (or premium) relative to the value of the underlying assets of the Company. As a result, losses (or gains) may be higher or lower than those of the Company's assets.
  • The Company may use gearing (borrowing to invest) as part of its investment strategy. If the Company utilises its ability to gear, the profits and losses incurred by the Company can be greater than those of a Company that does not use gearing.