‘Trump’s tax cuts have been a big win for American firms’

broader market. These companies have typically got larger firms competing against them, so we have to work out what qualities allow them to stand out.

The final aspect is how much money might we make if we are right, and if we’re wrong, how much do we lose? That risk analysis is embedded in every stock decision we make; it is not an afterthought.

Which holdings do you avoid?

We try to avoid over-indebtedness. Another area we avoid is emerging biotech companies. Most of their value is the market taking a view on whether a drug gets past the Food and Drug Administration watchdog or not. We only invest after a significant drug gets approved, when the risk is much reduced.

Have Trump’s fiscal policies helped small American firms?

Yes. Firstly, the [corporate] tax cuts disproportionately benefited domestic companies. Cash flows immediately went up and valuations improved. Small firms gained from increased capital expenditure and a bit more economic activity in America.

On the other hand, the agitation between America and China on trade issues has had a more negative impact on some of these companies.

If you make a product and some of the components come from China, there may be an increased tariff. Even if there isn’t, it introduces more uncertainty.

What makes you different from your rivals?

Firstly, we manage the fund trying to tap into exciting companies which will deliver returns to our investors.

We also think it is really important that we build risk management into every decision we make.

The other differentiator is that the team of analysts we have also covers larger companies. We want to have the perspective of knowing if the competitive strength of the larger incumbents is too much for a smaller rival to beat. Covering all the market gives us that perspective.

What has been your biggest mistake?

The biggest mistakes have been picking the wrong stocks. One we got wrong was E J Technologies, which makes computer memory. We thought pricing and demand for the product would go up. But its results were worse than our lowest expectations so we sold the stock and moved on.

When a company is as bad as we thought it could be, or worse, we will sell. We think it’s by far the best thing to do and not to hold it because it’s “cheaper”. It makes the fuselages of a lot of planes for Boeing and Airbus. There is significant demand for new planes, especially from Asia, and both firms have full order books for the next seven years.

Appetite is very strong and Spirit will benefit directly from that. It has the security of strong global demand for several years and it’s rare to have

What has been your biggest success?

that visibility on future orders in anything, to be quite honest. One important driver of that is China wanting to establish a domestic and international airline system. Even if China cancelled all its Boeing aircraft, they wouldn’t be able to get them from Airbus because they’re sold out as well. There is a lot of potential there. It is a tech company called Nutanix. It went public three years ago. It did very well at first, then missed its first quarter earnings and traded very badly.

But we liked the business. It had come up with a product that was more innovative and cheaper than its competitors, such as IBM.

Large companies frequently have market share they’re trying to protect, which stops them from innovating. They don’t want to come out with a better, cheaper, faster product, because it might be at a lower margin or disrupt their own business.

At the same time, Nutanix was coming up at the very top of surveys of what companies wanted to spend money on.

So we had a stock trading as though it was going to grow very slowly, but we were also getting information saying people really liked this product and were going to buy a lot of it. We bought lots and still own it.

Do you have your own money in the fund?

Yes. We are strongly encouraged to invest in our own funds.

How are you compensated?

Based on the profitability of the funds we manage.

What did you dream of doing as a child?

Playing rugby or alternatively a Gaelic sport for Ireland.

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