Asset Manager Overview
Troy Asset Management (TAM) is an independent fund management company that was established in 2000 by the late Lord Weinstock. In late 2023 it was announced that US private business, Lincoln Park Capital, acquired a stake in the business primarily from non-management shareholders including the Weinstock family. Despite this, the management of the business remains unchanged and it maintains the firm wide investment philosophy of seeking to prioritise the avoidance of permanent capital loss along with growing capital in real terms over the long-term. TAM manages a range of long only equity strategies as well as multi-asset funds.
Fund Manager/Team Overview
The lead manager of this fund is Blake Hutchins, who assumed the role in January 2022, following its previous incumbent, Francis Brooke, stepping away from day-to-day fund management. Prior to joining Troy in October 2019, Mr Hutchins was a portfolio manager at both Investec (now Ninety One) Asset Management and Columbia Threadneedle. Mr Hutchins is also head of the three strong UK team and is supported by portfolio manager, Fergus McCorkell, and analyst, Aniruddha Kulkarni. The team can also draw upon Troy's broader investment team, with all members sharing a similar investment philosophy and providing support across all of the group's strategies.
Investment Philosophy & Process Overview
In keeping with the house philosophy, the manager has a long-term and long-only approach to investing, blending stock selection within the context of the broader market backdrop. The investment process begins with an appraisal of the UK equity market, including a view on valuations, which helps determine the fund's cash level. This cash weighting can reach 20% if the manager considers company valuations to be stretched and/or if there is a particularly cautious outlook for financial markets. The team members then look for companies whose long-term potential has been under appreciated by the market. They will review, amongst other things, a firm's potential cash returns rather than its earnings, which are regarded as potentially misleading, the reliability of its cashflows and the strength of its balance sheet. Ultimately, the team seeks those businesses with high returns on invested capital that are supported by resilient franchises with natural competitive advantages and that are managed in the best interests of shareholders. This means that certain sectors, especially those in the more cyclically sensitive areas including oil and mining, housebuilders, banks and airlines, which the team feel do not meet these requirements, will be lowly represented or excluded entirely. In contrast, the portfolio will be tilted towards areas that are viewed as being far more resilient, such as certain areas within industrials, pharmaceuticals, household goods, food producers and beverages.
Essentially, the manager aims to provide investors with a premium and increasing income stream, and to grow the value of investors' capital ahead of the FTSE All Share benchmark over the long term. Overarching all of this is an inherent focus on capital preservation, where risk is not viewed versus any index, but rather as the avoidance of permanent capital loss. The fund is therefore managed without any regard to its benchmark, which can be dominated by a few sectors or companies and as such can look, and act, very differently. The final portfolio will be fairly concentrated and holding between 30-50 stocks. It is typically exposed to quality blue chip defensive companies drawn from across the FTSE 350, with the vast majority within the FTSE 100. Exposure to a single company within the portfolio is limited to 8%, but in reality positions rarely approach this size. The manager will also invest in overseas stocks where attractive opportunities arise. This may coincide with the hedging out of some of the currency risk depending on the team's investment outlook.
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