Ollie Beckett, fund manager of TR European Growth Trust, explains the rationale behind some of the new names in the portfolio and his process for identifying companies with good growth prospects. Ollie also discusses the “bizarrely negative” attitude towards Europe, where many companies have benefited from the Brexit saga.
Q: Hello and welcome to this latest video update for the TR European Growth Trust. I'm delighted to be joined by the fund manager Ollie Beckett. Ollie thank you very much for joining me today.
Now first off it looks like you've been increasing the number of stocks within the portfolio. You've come up from about 135 at the end of January to more than 140 as we speak today. So what can you tell us about some of those new names and why are they in the portfolio?
A: We're not going to add any more names to the portfolio, that should probably be the first thing to say, but recently we have added a couple of IPOs. One is Medacta, which is in orthopaedics, bringing new techniques and new technologies to the orthopaedic area; and also Karnov, a Scandinavian company which is providing information for the legal profession.
We've also ramped up our position in a Spanish company called Almirall, which does drugs for dermatology, so treatment of things like psoriasis, which is a big growth market. And I think another name we added was AEDUS, which is a Spanish house builder. So we've added a few names, fairly defensive names to be honest but with interesting growth profiles.
Q: There are some interesting names in there and some that we definitely won't have heard of before, so what's your process for identifying companies with good growth prospects? Are you going by some long term trends that help your decision making, how does it work?
A: I don't think we've got any great sort of rocket science up our sleeve. A lot of the sort of growth trends all of us will see every day in our life, so you'll see it. What we've got to be careful of is not getting lured into investment banking hype or overpaying for things. I mean at the moment I'd say a lot of people are overpaying for thematic investing – “Hey this is a really cool growth theme,” and overpaying. So there are a number of growth themes out there, whether it's in environment, whether it's in gaming, it's a question of paying the right price for these stocks.
Q: Okay, Europe doesn't get a lot of positive coverage and it's not particularly popular with investors but there must be some exciting things happening on the continent that investors would be interested in. So what can you tell us about Europe and perhaps some of the more interesting and exciting stuff that's going on there?
A: Okay first and foremost I'd say people have almost become bizarrely negative about Europe. There are some decent companies out there across the whole continent. Maybe things to point to would be the gaming sector in Sweden, which is now the sort of centre of gaming in Europe. Other areas, if you look at Amsterdam it's a city doing very well actually partly because of Brexit it's come out of it very strongly. Also, there are companies in Europe which have exposure to the UK which look really cheap; DFDS a cross-channel ferry, NOBIA the kitchen manufacturer which owns the magnet brand and supplies Travis Perkins, i.e. Wicks. There are a lot of very good companies. So people are far too quick to dismiss continental Europe.