JohnBaronPortfolios.co.uk

ARR is an investment company that follows a value-led, high-conviction approach, typically holding between 12 and 20 investments. The company employs a deep research process to identify businesses that can deliver high returns on capital, often looking to out-of-favour areas of the market to find attractively valued shares. In this interview John Hughman speaks to Gary Channon, founder and chief investment offer of Aurora’s manager Phoenix Asset Management Partners, about how his ‘Buffett epiphany’ led him to establish the company and influenced its investment philosophy; the importance of company management, and why meeting management only ever comes at the end of Aurora’s long research process; how understanding psychology is built into the investment approach; and why the company’s biggest mistake came from selling a share too soon.

ORIT is an ‘impact’ investment company that aims to deliver capital growth and income to its investors by investing in a technologically and geographically diversified portfolio of renewable energy assets across the UK, Europe, and Australia. As a leading exponent of the transition to net zero, ORIT is held within the website’s Green and Green ISA portfolios. In this interview John Hughman speaks with investment director David Bird about why diversification is so important for investors in renewable energy; how the company balances income generation and capital growth by investing across a spectrum of development, construction, and operational assets; the need for renewable investment to underpin future economic growth and national security; and how the company approaches investment in new renewable technologies such as battery storage and green hydrogen.

MMIT is an investment company that offers a high conviction portfolio of 20-30 smaller companies across emerging and frontier markets. Managed by seasoned emerging market investors Mark Mobius and Carlos Hardenberg, the company actively seeks to differentiate itself from broader emerging market benchmarks, with a heavy weighting towards high technology and healthcare businesses. In this interview we speak to Carlos Hardenberg about why the company’s strategy is to target profitable and innovative mid-cap companies in emerging markets; the deep investigative process behind stock selection, which includes screening for quality factors, economic moats, and entrepreneurial management; why bottom up analysis needs to be overlaid with a robust view of macroeconomic factors; why emerging markets no longer deserve their reputation as being higher risk vis-à-vis developed markets, and their underappreciated global potential in technology industries; and why the trust favours India and other emerging Asian regions over China.

CYN is an investment company focused on the natural resources sector, with the aim of providing investors with both capital and income growth through both equity and fixed income investments in mining and energy companies. The trust is co-managed by Ian ‘Franco’ Francis, Keith Watson and Robert Crayfourd and has delivered a NAV return of more than 600% since its launch in August 2003. In this interview we speak to Robert Crayfourd and Keith Watson about why the resource investor currently sees more opportunity in the energy sector than mining; how it’s managing the energy transition, both through investments in battery metals and via transition fuels such as gas and clean coal, which it sees as being imprudently excluded from some portfolios; the problems with government energy policy, and how the trust’s managers keep abreast of rising geopolitical risk and resource nationalism; what catalyst is required to kickstart investment in much needed supply after many years where the focus has been mainly on shareholder returns; and the managers’ views on short-term resource demand concerns caused by economic weakness, especially in China, and why an inflationary environment could continue to be supportive for commodity investing.

SCP is an investment company focused on the UK's mid cap index, the FTSE 250. The company takes a high conviction approach, holding around 50 companies that it believes have the potential to grow into market leaders. In this interview John Hughman speaks with the company's lead manager Jean Roche about how good stock selection has kept the trust's performance in step with the S&P 500 over the long-term on a total return basis; the importance of dividends and dividend growth to the trust's strong track record; why she's more bullish about the UK economy and market - and the UK consumer - than most; and how building ESG analysis into the investment process can improve returns.

When it floated in May 2023, AWEM became the first investment company to join the London market in 17 months. The company’s aim is to generate long-term capital growth by investing in securities that provide exposure to global emerging markets (EM), including companies on Western exchanges with EM exposure. In this interview we spoke to Prashant Khemka, founder of WhiteOak and manager of AWEM and sister company Ashoka India Equity (AIE) about overcoming the challenges faced in bringing the trust to market; the comparative growth attractions of emerging markets when compared to Western counterparts; the company’s rigorous valuation and risk-based stock selection process; and the company’s views on the profound geopolitical shifts currently taking place.

MYI is a diversified investment company with a globally unconstrained remit, and a target of delivering long-term total returns from capital growth and income above inflation. The 116-year-old investment company has been managed by Bruce Stout since 2004, with the addition of Martin Connaghan and Samantha Fitzpatrick in 2019. In this interview with co-manager Samantha Fitzpatrick we discuss how the company has navigated the recent challenging inflation and interest backdrop, alongside the looming threat of recession; the process behind investing in the highest quality businesses and the importance of dividend growth and balance sheet strength in stock selection; how the team balances a bottom up, valuation led approach, and a top down thematic approach; how the company allocates across global markets, and why Asia remains a hugely attractive investment destination; and how MYI will continue to be managed after the retirement of long standing manager Bruce Stout.

TENT invests in a variety of renewable infrastructure assets that support the transition to a lower-carbon, more efficient energy system. It targets predominantly UK assets and seeks to generate an attractive, long-term income stream with a positive impact for its shareholders, with over 90% of its income is contracted under long-term agreements. In this interview with lead manager Jonathan Hick, we discuss how its diversification across five technologies and focus on contracted revenue streams helps it deliver stable risk-adjusted returns to its investors; the huge opportunity in helping companies manage the transition to Net Zero on the ground; the impact of a higher interest rate environment on the renewables industry and the challenge in valuing renewable assets; the changing economics of battery storage, and how the trust is gaining exposure to this key transition technology; and the reality of the energy transition, and why it’s important to be technology agnostic as a renewable energy investor.

CVCG is an investment company focused on European corporate debt, through senior secured loans and sub-investment grade credit. The company’s primary focus is to generate income, but its team of analysts are also well-positioned to deliver capital growth by investing in bonds trading below par. That’s helped it deliver a NAV return of over 70% in its ten-year history, comfortably ahead of the AIC’s Debt – Loans and Bonds sector benchmark. In this podcast, John Hughman speaks with portfolio manager Pieter Staelens about how the trust has navigated the recent dramatic shift in the interest rate environment; why its long-standing focus on floating rate debt has proved prescient; how the focus on large companies is helping it avoid distress in the corporate credit market, and how its deep pool of analysts allows it to target the best risk adjusted returns; and why the low interest rate era might not return for the foreseeable future. 

UEM is an investment company dedicated to equity investments in infrastructure, utility, and related sectors in the emerging markets. Supported by a team of specialist industry analysts, the company has been managed by Charles Jillings since it was established in 2011 and has beaten the global emerging markets benchmark over 1, 3 and 5 years, as well as offering an attractive dividend. In this interview, we talk to Charles about the sectors and regions favoured by the trust including transportation, utilities, and digital infrastructure; why the company takes a bottom up approach to stock selection, and how this fits into an overlay of the four megatrends shaping global infrastructure investment; the difficulties posed to investors by China; and why the integration of ESG, and particularly governance and good management, is a key aspect of the company's investment approach.