Fund man­ager in­sights:

Finweek English Edition - - COMPANIES & INVESTMENTS -

FUND MAN­AGER Sean Ash­ton says that An­chor’s prag­matic ap­proach to in­vest­ing of­ten sees them meet­ing with man­age­ment teams in or­der to ‘kick the tyres’ of busi­nesses.

While the fund is not tied to any one ap­proach, it does pre­fer to buy good qual­ity busi­nesses at rea­son­able prices. This can also in­clude smaller com­pa­nies, or non-in­dex shares, that dis­play the same char­ac­ter­is­tics of larger busi­nesses and for which the fund thinks has a suit­able mar­gin of safety priced into its val­u­a­tion. An ex­am­ple of this in the port­fo­lio would in­clude the Spur chain of restau­rants.

But much of the per­for­mance that the fund has de­liv­ered so far has come from large-cap stocks. The fund bought Steinhoff at R23/share and ben­e­fit­ted as the share price surged to R40+/share. Stein- hoff re­mains the fund’s largest hold­ing. Naspers* is another high-qual­ity com­pany that the fund bought low (at R625/ share) and has con­tin­ued to hold.

An un­usual hold­ing in the fund is that of the Alexan­der Forbes Pref­er­ence Share In­vest­ments. Ash­ton said that the fund be­gan ac­quir­ing the share at lev­els around R13, and thinks its in­trin­sic value could be as high as R20/share. The un­wind­ing of debt struc­tures in ad­vance of a list­ing on the JSE by Alexan­der Forbes this year means that share­hold­ers could re­alise this value sooner rather than later. Lately the fund has moved quickly to in­crease it weight­ing to re­sources through its ex­po­sure to An­glo and BHP Bil­li­ton.

Port­fo­lio Man­ager: Sean Ash­ton

*Fin­week is a Me­dia24 pub­li­ca­tion, which is a sub­sidiary of Naspers.

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