Are disruptors the new kid on the global equity investment block?

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Are the solid and dependable companies that were seldom left off an investors’ stock picks slowly being overlooked in favour of companies that lead the world in technological innovation and drive changes in consumer behaviour? We are starting to see ‘Unicorn’ status being increasingly referred to as these industry disrupters reach valuations of $1 billion and more. Are asset managers changing focus to companies who disrupt traditional industries and want to change the status quo and if so, why? We spoke to Charlie de La Pasture from High Street Asset Management and Justine Brophy from AnBro Capital Investments about their investment strategies for their Global Equity Funds.

A global macro strategy is a strategy that primarily bases holdings, including long and short positions, on macroeconomic principles. These actively managed funds attempt to by investing in fixed income (bonds), equity, commodity and foreign exchange product markets.

Wealth Warriors is a global equity fund managed by High Street Asset Management, which gives South African investors access to the world’s most disruptive companies. It aims to provide long-term capital growth by using a top-down thematic approach with a distinct focus on the disruption of conventional industries. “We invest in companies that lead the world in technological innovation and which drive changes in consumer behaviour,” says de La Pasture. Although many of the companies that Wealth Warriors invest in are listed in America, the Fund has a global mandate with the flexibility to find disruptors in both developed and emerging market countries.

de La Pasture believes there is tremendous opportunity to invest across themes that are expected to disrupt and shape the world of the future. “In recent years we have seen a systematic shift in the way we work, communicate, eat, move and live, which has served as an important reminder that there is nothing permanent except change. The companies driving this transition are innovative, adaptable, and are often still at the very beginning of their growth curves. They share characteristics that we view as essential to be included in Wealth Warriors: pioneering founders, increasing top-line growth, solid balance sheets, competitive margins and resolute cash conversion. All factors that we expect to drive consistent share price appreciation to the benefit of the long-term investor,” said de La Pasture.

Since inception in 2016, the Fund has returned 17.8% in dollars annually. This is despite a difficult year for performance in 2021, with Beijing’s regulatory crackdown on Chinese tech companies and global supply chain shocks serving as significant obstacles for top-line growth.

Check out High Street’s details on FUND HUB, where you can access video interviews, factsheets and contact details High Street Asset Management – FUND HUB

The overarching investment philosophy of the AnBro BCI Unicorn Global Growth Fund is simple – they look forward and learn from the past but are not defined by it. “We invest in visionaries, disruptors and leaders with demonstrable skills and talent. They are honest and have integrity ingrained in their DNA and are trying to make a difference to staff, customers, communities and the planet. We invest in them and alongside them so we can participate in the change the world is undergoing at what feels like an unprecedented rate,” says Brophy.

The companies they own are therefore either managed, run or greatly influenced by the founders that started them. “These incredible individuals often forgo large compensation packages and short-term thinking because they are heavily invested in their own business. Their wealth is not created by a salary or a bonus but by long-term capital appreciation of the sizeable shareholdings they have in the companies they founded,” adds Brophy.

The Fund invests in founder run, managed and influenced companies that demonstrate strong cash flush balance sheets; have large growth runways; can scale up significantly and grow into the markets they serve; with recurring income, high margins and light capex needs. “We spread the investments across many different opportunities to create a truly diverse set of investments without any concentration risk. The companies we invest in are growing rapidly, far faster than global GDP. They should also be ‘recession resistant’ by virtue of their disruptor status. Many of the companies we invest in are small relative to the opportunities and markets they are pursuing and should be able to continue to grow in most economic environments,” says Justine Brophy.

The Unicorn Global Growth Fund is a USD denominated portfolio, which targets an annual return of 20% for investors. The Fund has a 5-year plus investment horizon as it takes time for disruptors to fully deploy their strategy and to add value to the investor.

Check out AnBro Capital Investments’ details on FUND HUB, where you can access video interviews, factsheets and contact details ΛnBro Capital Investments – FUND HUB

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