‘A tracker would have been better – but stick with us’

Political chaos has created a challenge for investors in British companies. Polar Capital’s £965m UK Value Opportunities fund has had a difficult time since its managers, Georgina Hamilton and George Godber, defected from rival asset manager Miton. Although it has returned 12.6pc since launch, investors in a fund that simply tracked the FTSE All Share index would have seen their money grow by 15.5pc.

Here they tell Telegraph Money why the best response to Brexit turbulence is business as usual and explain why they charge investors a performance fee on top of an annual charge.

George Godber: We are “value” investors, so we believe the price you pay for an investment is what will determine the returns you get. We don’t invest in “themes”, such as healthcare; all our trades are made using strict criteria on value.

Georgina Hamilton: We look for two types of share. The first is where the share price is below the value of the firm’s assets – so you could sell all the assets for more than the price on the screen.

GG: The second is a business that is making good profits and that we think can continue to make good profits, but where the market doesn’t agree so it’s priced more cheaply than its true worth.

GG: If you look at our top 10 investments, it will look very different to others’ top 10. Our “active share”, which measures how much of the fund is different to a benchmark (in our case the FTSE All Share index), is 89pc. A lot of British funds just focus on the small group of the largest stocks. We invest in large, medium-sized and smaller firms and find some real gems. GH: We don’t make our investments predicated on particular political outcomes because, quite frankly, if we got it right it would be a complete fluke. We try to focus on companies that meet our value criteria. We use volatility in markets to add to our holdings at better prices. GG: Polar managers have to focus on making returns rather than growing their funds forever. We aren’t at closing point yet, but if it hit a certain size we would look to close the fund to protect performance. This is an extremely y cheap share. It does urban regeneration, , construction, “partnership” housing, which is becoming a preferred way to address the housing g crisis, and office fit-outs. Companies

performed well, while cheaper stocks have not.

GH: That doesn’t change our view that buying at attractive prices can be successful over the long term, it just means it can be out of favour.