Doug Lawson one of Amati UK's three managers.

Amati UK Smaller Companies’ quality strategy pays off

Doug Lawson one of Amati UK's three managers.

Doug Lawson one of Amati UK’s three managers.

Edinburgh-based Amati Global Investors is a boutique investment house that does not set out to be all things to all people. Its focus is on smaller companies, plain and simple.

From its prestigious Charlotte Square address, its three-strong investment team, packed with experience, goes in search of the success stories of the future.

Embryonic firms that will sit in one of two venture capital trusts that they manage.

Or slightly more mature businesses that will help form the core of the Amati UK Smaller Companies fund.

That focus is reaping rewards, judging by the performance of the fund.

A mere £4 million in size five years ago, it now has £86 million of assets under its wing and the returns look impressive.

Over the past three years, only one UK smaller companies fund – Old Mutual UK Smaller Companies Focus – has made better gains.

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Doug Lawson, one of the three managers, says the objective is to look for high-quality companies that will grow irrespective of the macroeconomic backdrop.

‘We are both benchmark and economy agnostic as managers,’ he says.

‘Indeed, if you worried about the state of the economy, you could have spent the past ten years sitting on the sidelines as an investor. What a mistake that would have been.’

The company named after a famous 16th Century Italian violin makers is one of the most successful UK smaller companies fund.

The company named after a famous 16th Century Italian violin makers is one of the most successful UK smaller companies fund.

The fund holds about 60 stocks, with market values ranging from £23 million (Georgian Mining) to £4.7 billion (Just Eat).

More than 60 per cent are listed on the AIM market. Sometimes a firm previously held in one of the two venture capital funds is so successful that it makes the jump into the investment fund.

Recent examples include Keywords Studios, which provides technical services to the computer gaming industry, and Accesso, which supplies ticketing technology to theme parks.

Though the portfolio is devoid of the usual big names, it does have holdings in upmarket mixer maker Fevertree Drinks and online fashion group boohoo.com.

The other managers are Paul Jourdan and David Stevenson. Like Lawson, they monitor firms within specific stock market sectors, but no investment decisions are taken without agreement.

‘We are equally responsible for the fund’s performance,’ says Lawson, ‘and we like to think that by debating potential buys and sells, we avoid most mistakes.’ Another control is that no holding can represent more than five per cent of the fund’s portfolio.

Paul Jourdan; one of the three managers at Amati UK was a professional violinist

Paul Jourdan; one of the three managers at Amati UK was a professional violinist

This year, AIM-listed wealth manager Mattioli Woods bought a 49 per cent stake in Amati Global Investors. Lawson insists that nothing has changed as a result and that the Amati name will live on. He says Mattioli will enable it to cope better with the regulatory headwinds faced by all fund management groups.

As for the Amati brand, it stems from Jourdan’s love of music. Before he cut out a career in fund management with Edinburgh-based Stewart Ivory (now part of First State Investments) and then Noble Fund Managers, he was a professional violinist with the City of Birmingham Symphony Orchestra.

When Jourdan engineered a buyout of Noble in 2010, he renamed it Amati after the famous 16th Century Italian violin makers. Indeed a violin adorns its website.

‘Paul concentrates on fund management these days,’ says Lawson, ‘although he has been known to get out his violin at the office Christmas party.’

Posted on; DailyMail>>

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