Investing in innovation represents a large, growing, and diverse opportunity set for outperformance in global equities – an area in which there is proven market inefficiency. Specialist asset management boutique, Amati Global Investors, has demonstrated its ability to capture this opportunity through its management of the TB Amati UK Smaller Companies Fund and Amati AIM VCT plc, and has been looking to enhance its offering in this area for some time; Amati is therefore pleased to announce that is has received regulatory approval for a new fund, the TB Amati Strategic Innovation Fund, which is expected to launch on 23rd May 2022, preceded by an initial offer period commencing on 9th May.
Investing in companies at the leading edge of innovation and change within their industries, delivering innovative products and services, through ground-breaking business models, the Fund creates a fresh and exciting opportunity for those looking to increase their exposure to companies leading the charge in meeting today’s greatest economic, consumer and societal challenges.
The Fund will adopt a broader, more balanced approach to innovation investing – not simply focusing on high growth opportunities which have yet to achieve sustained profitability and cash generation, but also on more mature and higher quality business models that benefit from enabling and adopting innovation. This will broaden the opportunity set, balance fundamental risk in the portfolio, and help to protect investors from the kind of volatility experienced by some growth and innovation stocks over the past year.
With an active share likely above 90% (and quite likely above 95%), and populated by non-consensus ideas, the Fund will invest in a high conviction portfolio of 30-50 global equities – pioneers, enablers, and adopters of innovation. With a long-term investment approach, the Fund will look to outperform markets and peers over periods of five years or more. The managers will adopt a ‘go anywhere’, all cap, multi sector and style agnostic approach, but will most likely guide investors to growth and away from mega-caps, towards sectors more typically associated with innovation – technology, healthcare, and industrials included – powered by a bottom-up search for ‘innovation frontiers’ and companies best positioned to benefit from such innovation.
The new Fund will be managed by Mikhail Zverev, Graeme Bencke and Dr Gareth Blades, three highly experienced investors, with complementary track records and skill sets.
Zverev and Bencke bring multi-year top quartile track records in running concentrated, global equity portfolios, where innovation and technological change were key drivers of their outperformance. The team draws upon a mix of academic qualifications, investment, corporate finance and consulting experience, enabling the managers to understand both the technical complexities of innovative industries as well as the financials, and the business models of the companies behind the innovation. This helps to ensure that Amati is best placed to capture this opportunity for its clients.
“The innovation opportunity is granular, company specific, and best discovered from the bottom up. The UK is renowned as a global centre of excellence in the areas most closely associated with innovation – healthcare, technology, materials science, and specialist industrials amongst them. It ranks as a global leader on numerous innovation metrics.
“Through our work with the UK Smaller Companies Fund and our AIM Venture Capital Trust, we enjoy deep relationships with companies at the leading edge of these innovative industries – access to founder-entrepreneurs, senior executives, and senior technical staff, which would be the envy of many global investors. This enables us to identify promising areas of innovation, to assess the value of that innovation, and to build an understanding of the global ecosystem that is involved in, and which benefits from such innovation. This intellectual and research synergy creates a powerful advantage which we will look to leverage for our global equity clients.”Mikhail Zverev
“Innovation can be a significant differentiator to the success of any business, and it has been frequently under-valued by investors. I believe our approach will enable us to capture this opportunity for our clients in the global equity asset class, consistent with our desire to construct class-leading investment products which remain fit for purpose and that investors can hold over the longer term.”Dr Paul Jourdan Founder and CEO