Marlborough UK Micro-Cap Growth Fund Class P Acc
UK Smaller Companies
Rated Fund 2013-19. Taps into almost 300 'micro' companies
Marlborough UK Micro Cap Growth has grown to a size of £1.3 billion but continues to produce very good results.
Giles Hargreave, a highly experienced smaller companies specialist, has run the fund since inception in 2004. His co-manager for the last seven years is Guy Feld.
It invests in companies with a market capitalisation of £250 million or less at the time of purchase. In fact, almost half of the portfolio is invested in ‘micro’ companies of less than £150 million. Companies at this end of the size spectrum are at higher risk of failure than more established firms, but the managers offset this risk by holding a diversified portfolio of more than 250 holdings. At the end of 2018, the fund also had a cash buffer of almost 6%.
The managers analyse each company carefully. They very rarely invest in a company without meeting the management face-to-face. Hargreave says choice is a great advantage of investing in small companies. The Alternative Investment Market and FTSE Small Cap, FTSE Fledgling and FTSE techMark indices include more than 1,000 companies operating in many different fields.
He and Feld are backed by a large team undertaking primary research, trying to uncover the best opportunities before the rest of the market. As part of the process they meet more than 25 companies every week.
They like companies that operate in niche markets, without too many competitors. Such businesses also need to have good managers, strong balance sheets and good free cash-flow. The managers run their winners rather than taking profits early. Although they keep economic trends in mind, they are focused first and foremost on the health of their companies.
Narrative and ratings content all as of 01 January 2019.See all Money Observer rated funds
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Guy, a graduate of Oxford University, has over 20 years' City experience dedicated to the research and fund management of small and mid-cap equities. He joined the investment team in 2003 and has a particular focus on the tech sector and other "New Economy" and growth companies. Guy co-manages the Marlborough UK Micro-Cap Growth Fund with Giles Hargreave.
Giles Hargreave is Chairman of Hargreave Hale Ltd. After starting his career in 1969 as an analyst with James Capel, Giles joined Management Agency and Music as a private fund manager in 1974 before founding Hargreave Investment Management in 1986. Giles then merged Hargreave Investment Management with Hargreave Hale & Co, a provincial stockbroking firm controlled by other members of his family, in 1988 and took over as Chief Executive. Giles chairs the investment committee's weekly meetings in which the team reviews existing and potential investments.
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