JohnBaronPortfolios.co.uk

VNH is one of three London-listed investment companies targeting the high-growth potential of frontier market Vietnam. Launched in 2006, VNH invests in high-growth companies in Vietnam, focusing on domestic consumption, industrialisation and urbanisation. Latest results show its concentrated approach helped it beat its benchmark in a difficult year for the country’s main index, which remains one of the world’s cheapest markets despite its significant growth prospects. The company is not held in the portfolios but these occasional interviews with other respected managers seek to aid investment perspective. In this interview Craig Martin, chairman of Dynam Capital which took over the management of VNH in 2018, talks to us about how China’s extended shutdown has accelerated the expansion of Vietnam’s high-tech manufacturing industries; the rising intellectual capacity of Vietnam, supported by the county’s investment in STEM education; the opportunities presented by growing levels of urbanisation and wealth, and the growth of the Vietnamese consumer; and the hurdles faced in driving the country’s industrial development in the face of Net Zero challenges.

EDIN is a leading FTSE 250 Investment Trust which sits within the AIC UK Equity Income sector. The company is managed by James de Uphaugh and Chris Field with a focus on fundamental business research to create a diversified and high conviction portfolio of 40-50 investments. The managers are supported by an experienced team of investment analysts. The company does not have any in-built investment style biases and seeks to deliver long-term added value regardless of economic and market conditions. The company’s large positions include Shell, Unilever and BAE systems, while its biggest sector exposure is retail. In this interview John Hughman speaks to James about the strategies the team has employed since taking over its management at the time Covid struck in April 2020; why there’s value to be found in industries like oil & gas and retail (the latter being “written off as yesteryear”); why a focus on “gloomy” short term economic news may be overdone; the importance of macroeconomic factors including ESG in determining sector exposures; and how an accelerated “corporate Darwinisim” is favouring the larger businesses in which the company invests.

Managed by Ben Goldsmith, Luciano Suana and Graham Thomas and sitting withing the AIC’s Environmental sector, MHN is an investment trust focused on companies – both public and private – that “are demonstrably delivering or benefiting significantly, from the efficient use of energy and resources.” Key positions within the highly concentrated 16-holding portfolio include Alphabet (23.6%) and Microsoft (11.2%), along with several transportation and infrastructure companies. Since launch in 2015, the company has delivered a NAV return of 40.8%. In this interview, Ben and Luciano discuss the holdings within the portfolio, and why they believe the efficient use of resources, in particular energy, is the most important factor in environmental investing. They also explain why they target heavy energy users rather than energy providers and those providing energy reduction technologies; how their agnostic approach to public and private deals boosts returns; and why they believe the high-quality positions within their portfolio, with significant barriers to entry, mean the current wide discount to NAV is unjustified.

PIN is a leading FTSE 250 private equity investment trust which invests in a diversified mix of direct private company investments and ‘invitation only’ funds across three primary sectors – digital, healthcare, and consumer non-discretionary. It's been around since 1987 and has a simple aim of making private equity - and associated returns - publicly available while maximising capital growth over the long term. In this interview, we talk to Helen Steers, lead portfolio manager and investment partner at parent group Pantheon - a global private equity manager with $90bn under management. We discuss the company’s unique approach and the advantages it offers private investors; the secular growth on offer in its target sectors; how ESG principles are core to the company’s ability to create value; and why myths surrounding private equity has left the sector trading at unjustified discounts to what currently has proved to be robust net asset values.

API aims to provide an attractive level of income, alongside capital and income growth, by investing in a diversified portfolio of commercial property assets - currently more than half of the portfolio is held in industrial assets, partly reflecting the growth of logistics warehousing in the UK in recent years. The company has been managed by Jason Baggaley since 2006, and recent figures show it has delivered a benchmark-beating total return of 56% over the last 5 years. In this interview, John Hughman talks to Jason about the challenges faced by the property industry in the wake of the pandemic and as a result of rising rates; how he’s been adjusting his portfolio in response; where there may be buying opportunities; the importance of considering demographic, environmental, and technological trends when investing in property; and why there may be a fair amount of concern already baked into prices.

TMPL is a £750m investment company established in 1926 that takes a value investing approach combined with deep fundamental research focused on establishing the ‘intrinsic value’ of potential investments. The trust has a fifth of its assets in the energy sector via holdings in BP, Shell and TotalEnergies, which reflects its approach to creating long-term growth by buying companies that have been overly discounted by the market. In this interview, portfolio manager Ian Lance talks to John Hughman about how rising inflation and interest rates have improved the outlook for value investing vs growth; how to identify value; why management changes can often be a good indicator that an unloved company could be ready to stage a recovery; and why taking advantage of the historically long-term outperformance of value investing requires a ‘conviction contrarian’ approach. The company is not held in our portfolios but we include interviews with other respected managers in order to aid perspective.

IEM's two decades of experience of investing in sustainability position it at the forefront of the burgeoning ESG investing industry. The investment company has delivered strong long-term returns, and despite a difficult year which has seen a softening of valuations among the growth-oriented companies in which it invests, its exposure to the secular trends supporting global Net Zero obligations should see its investee companies deliver significant earnings growth over the coming years. In this interview, co-manager Fotis Chatzimichalakis speaks with John Hughman about how the trust is positioned to take advantage of the sizeable opportunities in sustainable investing; how it defines its investment universe and its approach to stock selection; and how digital technologies are driving efficiency improvements and carbon reduction across numerous industries. The company is held in a number of our portfolios.

FGT is one of the UK’s largest investment trusts, with a long-track record of delivering market beating returns from a concentrated portfolio of predominately UK equities. Its manager Nick Train is well known for his conviction approach – buying high-quality, income generating companies and holding them for the long-term. In this interview, Mr Train explains the thinking behind the company’s investment approach, how it has stood up to the challenges of a difficult year and why he remains confident in the long-term growth prospects of his investee companies. In particular, he points to the significant opportunities still to be unlocked as more companies turn to digital technologies and emerging markets to power their next phase of growth and keep dividends flowing.

In this podcast John Hughman speaks to Tim Levene, manager of fintech investor Augmentum Fintech (AUGM), which features in our Summer and Thematic portfolios. The company is the only pure play fintech investor listed in London. Rising interest rates have had a significant impact on its share price performance this year, which has swung from a premium to a significant discount to Net Asset Value, but the secular tailwinds behind the growth of fintech remain intact - and the company’s strong balance sheet leaves it well positioned to capitalise on lower valuations across its investment universe. Tim explains why AUGM’s current deep discount to NAV isn’t reflective of its conservative valuation policies or the rapid growth its investee companies are delivering; how the traditional financial services industry has been slow to exploit new technologies, leaving the door open to young companies to disrupt various sub-sectors of the financial services industry; and how the company filters through thousands of fintech investment opportunities to identify those companies with the highest growth potential.