Well, what a year it’s been. As I pour myself out (another) glass of something nice, I thought it’s a good opportunity to reflect on the first full year of moving to the buy side and running the 𝘉𝘦𝘢𝘶𝘮𝘰𝘯𝘵-𝘋𝘢𝘳𝘬 𝘍𝘢𝘮𝘪𝘭𝘺 𝘖𝘧𝘧𝘪𝘤𝘦. This year has been all about establishing our framework as better investors, formalising processes, challenging our existing holdings, rationalising smaller names in the portfolio, building up relationships and somehow managing time to take a look at some new names. Whilst this certainly doesn’t guarantee alpha, I think it behooves us all as Fund Managers to work on our structures to give us a better 𝘤𝘩𝘢𝘯𝘤𝘦 𝘰𝘧 𝘴𝘶𝘤𝘤𝘦𝘴𝘴 each time we invest. 

I’m very proud of what we’ve achieved these past twelve months, with a particular highlight being establishing the 𝗠𝗶𝗰𝗿𝗼 𝗖𝗮𝗽 𝗔𝗹𝗹𝗶𝗮𝗻𝗰𝗲, a network of HNWs, Family Offices and institutions committed to supporting small and micro cap UK listed companies. This included productive meetings with James Ashton of the QCA and Charles Hall of Peel Hunt to discuss how we can continue to promote this often overlooked segment of the market.

Anyway, enough of that wooly stuff, 𝘸𝘩𝘦𝘳𝘦 𝘩𝘢𝘷𝘦 𝘸𝘦 𝘢𝘤𝘵𝘶𝘢𝘭𝘭𝘺 𝘥𝘦𝘱𝘭𝘰𝘺𝘦𝘥 𝘤𝘢𝘱𝘪𝘵𝘢𝘭?

Well, we’ve taken two larger positions, and two opening sizes, as well as numerous trading and arbitrage positions. Our two nursery names are 𝗢𝗻𝘄𝗮𝗿𝗱 𝗢𝗽𝗽𝗼𝗿𝘁𝘂𝗻𝗶𝘁𝗶𝗲𝘀 and Concurrent, both of whom (although very different) are defined by impressive management, rigorous attention to detail and a real niche which is hard to replicate. We also made a sizeable follow on investment in Gulf Marine Services PLC, whose cashflow characteristics, rapidly improving debt ratios and criminally low valuation has seen this rise to become one of our largest positions. Whilst performance is being somewhat dragged by background warrant / large holder technical selling, in the long term our investment thesis is now more solid than ever, and I see no reason that Mansour Al Alami and Alex Aclimandos, MBA,CMA won’t continue to drive this impressive business forward. A true example where, having carried out extensive due diligence and meetings, we stick to our confidence in the company, rather than being influenced by market noise. Finally, our largest new position is in 𝗢𝗻𝗱𝗶𝗻𝗲 𝗕𝗶𝗼𝗺𝗲𝗱𝗶𝗰𝗮𝗹, where we played a reasonable part in the 8.5p placing during November. Whilst we are by no means biotech / healthcare investors (this being our only major holding in the sector), we met with Carolyn Cross and couldn’t have been more impressed. Best in class technology in an incredibly important area (preventing costly and life threatening infections which are contracted in healthcare settings), along with support from leading industry players - such as Molnlycke and HCA, who are operating the trial - all added up in our mind to a high risk, but hopefully very high reward and socially impactful investment.

We closed or nearly closed (painfully) our equity stakes in ECO BUILDINGS (where we had built up our position when it was the old Fox Marble) as well as Revolution Bars Group PLC (now, weirdly, The Revel Collective). The latter, curiously, we were not brought inside on the 1p raise by house broker, Cavendish, despite being a 3.74% shareholder and having taken part in both 20p raises previously. A little odd! Both these exits were majorly in the red, which is never a great sight, but I’m confident we learned a lot from these mistakes.

Arb names we were involved with included Kin & Carta, Learning Technologies, Impellam, National World, Keyword Studios, Eckoh, STM, Trinity E&P, as well as riding the Equals and Benchmark sagas through the year. Mostly a success, but, as with all arbs, not without risk!

𝘈𝘴𝘪𝘥𝘦 𝘧𝘳𝘰𝘮 𝘵𝘩𝘦 𝘸𝘪𝘥𝘦𝘳 𝘉𝘋𝘍𝘖 𝘱𝘪𝘦𝘤𝘦, 𝘸𝘩𝘢𝘵 𝘥𝘪𝘥 𝘐, 𝘱𝘦𝘳𝘴𝘰𝘯𝘢𝘭𝘭𝘺, 𝘭𝘦𝘢𝘳𝘯?

Well, firstly, that this is a very strange and unique job. 99% of the work we do - to analyse a company, prepare for meeting management, reading report and accounts - ultimately comes to ‘nothing’ when we don’t invest. Additionally, given we generally operate on a minimum of a five year horizon, it is fundamentally too early to measure any kind of success. And, by the time those years roll by, it’ll be too late often to do anything about it! All we can do is stay courageous, keep intellectually open, challenge our assumptions, learn from everyone around us, ask questions and make constant tiny improvements.

Most importantly, a 𝗵𝘂𝗴𝗲 𝘁𝗵𝗮𝗻𝗸 𝘆𝗼𝘂 to everyone who has supported us, worked with us and put up with my insane level of questioning during meetings. To all the people who have passed on tips, shared their wisdom, told me I’m doing something completely wrong or simply provided somewhere to bounce ideas off, thank you. I couldn’t do what I do without the huge network of support that often goes overlooked.

I’m proud of what we have achieved this year, a thoroughly enjoyable laying of the foundations, so here’s to 2025 - the year the UK equity bounces back?