UK small caps have struggled against their larger cap peers in recent months, but if you can avoid the banana skins there are some very attractive entry points for businesses, according to Ken Wotton, manager of Strategic Equity Capital plc (SEC).
In this interview, Wotton tells the IC’s Mary McDougall where he thinks the best opportunities are, why he likes to run concentrated portfolios and what he has been buying and selling recently. He also describes how he approaches valuing companies, to what extent macro economic factors play into his decision making and what he wishes he had known when he started his career.
00:00 - Intro
01:35 - Outlook for UK small caps
03:30 - Preferred valuation metrics
04:55 - Profitable holdings
05:48 - Macro factors effecting investment decisions
08:40 - Changes to Strategic Equity Capital since you took over
12:28 - Largest proportion of a company you own?
14:07 - Would you consider yourself an activist investor?
15:05 - Fund size
16:12 - Favourite holdings
20:10 - M&A as part of investment case
22:25 - Quality UK PLC's leaving the market
23:52 - Participating in IPO's
24:39 - Healthcare and financial services sectors
26:57 - Filtering companies
28:05 - Areas of expertise
29:58 - Advice for your past self
31:02 - A book that's influenced you