‘Today’s markets remind me of the dotcom crash’

Few people have as much investment experience as Angela Lascelles. She founded OLIM with Matthew Oakeshott in 1986 and has managed the £200m Value & Income investment trust, among other funds, since then. She explains why the stock market is reminiscent of the “tech bubble”, how she got stung by Carillion and why she’s avoiding Fever-Tree.

Matthew manages the property, which is about a third of the portfolio, and I do the stocks, which is the rest. We hold between 30 and 40 companies and do not normally have more than 10pc in one sector.

The portfolio is roughly split between FTSE 100 companies and small and medium-sized companies. We focus our research on smaller companies but do not normally look at firms with market values of less than £100m. Although the portfolio is quite concentrated in terms of stocks, we are less risky than the FTSE All Share index, which is dominated by a few very large companies.

We have four buckets. The first we call “unrecognised growth” – examples at the moment include Halma, the environmental technology firm; Beazley, the insurer; and convenience retailer Conviviality. These are high-quality companies that we locked into at attractive valuations.

Then we have the stable income providers – the likes of Vodafone, GlaxoSmithKline and oil companies. The third is firms recovering and restructuring, that currently includes Unilever. The last bucket is stocks that are cheap and won’t be held for long.

We never go for anything that’s fashionable. We hold Vodafone now but we did not have any exposure back in 1999 when it was 15pc of the index. Angela Lascelles co-founded OLIM LIM in 1986 with Matthew Oakeshott, and d is one of the UK’s s longest serving g fund managers. s.

She is a manager on the he Value & Income me Trust, as well as the UK Equity Income fund. She is also responsible for the firm’s bond holdings. At the moment that would mean avoiding very expensive growth stocks, such as Fever-Tree, the tonic maker. It’s highly successful but does not fit with our process. We have never had exposure to small mining or oil exploration companies, and we wouldn’t go near gambling or tobacco companies – we have an unofficial ethical slant.

Angela Lascelles has been a fund manager for 30 years. She tells Sam Brodbeck about today’s bargains

Carillion. I like outsourcing and it passed our initial screening tests. In the early years it did some good deals. I met the management and the brokers and I had a good opinion of them.

I was concerned about its borrowing anyway but then in July 2017 there was a profit warning and I thought “time to get out”. I sold out completely at 124p and made a loss.

Many years ago there was a company called Vosper Thornycroft, a shipbuilder [now part of BAE Systems and Babcock]. In the late Eighties people were worrying about engineering and the economic cycle and everyone said not to touch it. But it had surplus cash, orders from the Middle East, a 7pc yield and was only valued at 6.5 times earnings. It became 10pc of the trust’s portfolio – it did incredibly well. There’s a see-saw at the moment. It reminds me of 1999 to 2000, when any company to do with technology had a sky-high valuation and anything to do with consumer spending was lowly rated. There are loads of companies on yields of 6pc or more, which I think are far too cheap. Many are in the consumer sector. Brewery company Marstons, for instance, is yielding 7.3pc. Earnings are growing and the management must be thinking, “What more do you want?”

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A third of the trust’s assets are in direct property, and that sector is unloved at the moment. It has also borrowed at very high interest rates, which will begin to run off soon. And because one of the directors owns a large proportion of the trust’s shares, dealing can sometimes be difficult. Yes, a lot. I did philosophy at university. My father was a stockbroker and said I wouldn’t be able do that because I was a woman.

I went for an interview at MI6 but they said I’d be learning typing and shorthand for a few months and I hadn’t come all that way to do that.