Evenlode is an investment business, owned by its staff, that makes money for clients in its own quiet way.
Based in Chipping Norton, Oxfordshire, its 18-strong investment team manages £5.6 billion of assets with an overriding goal of generating ‘smooth’ returns for investors.
Although its £3.3 billion income fund has been so popular that it is currently deterring new investors from coming on board with a 5 per cent entry charge, Global Equity Income and Global Equity remain open for business.
Global Equity is the youngest of the three funds and in absolute terms has the best investment record. With £433 million under its belt, it is on the cusp of its fourth birthday and has so far generated an overall return of 54 per cent.
This compares with a 43 per cent gain achieved by the average global investment fund.
‘Global Equity has done well in varied market and economic conditions,’ says Chris Elliott, joint manager alongside James Knoedler. ‘We’re especially pleased with how the portfolio has fared since the inflation shocks of 2021 and beyond. It has performed well, confirming the quality of our stock selection.’
The managers aren’t interested in making big sector bets or favouring specific stock markets. Their mission is to find profitable, cash-generative companies that have a competitive edge – and an edge that will persist into the future.
‘We’re looking for three key ingredients,’ says Elliott. ‘We want to buy companies that have strong market positions, have a sustainable competitive advantage over rivals, and are willing to sacrifice some profits in order to continue investing in their businesses.’
There are just short of 80 companies on their radar, but the fund is currently invested in only 33. Of these, 20 have been held by the fund since it was launched in July 2020 – the likes of Mastercard and Alphabet (its two biggest positions), Swiss food giant Nestlé and Spanish software company Amadeus.
‘For stocks that we like, we set a price that we are comfortable buying at – and the price we would look to get out at,’ adds Knoedler.
‘By doing this, we are regularly shuffling money around our opportunity set to generate the best returns for investors without taking too many risks.’
Recent additions to the portfolio include UK exhibitions group Informa, shipping broker Clarksons (also UK listed) and US online accommodation booking service Airbnb.
Disposals include US cosmetics giant Estee Lauder and management consultant Aon – companies whose shares they thought were no longer cheap and faced cloudy outlooks.
Although the fund has exposure to some of the giant US tech companies, artificial intelligence (AI) specialist Nvidia is an absentee. ‘At the right price we would buy it,’ says Knoedler.
‘But, ideally, we would like to have a longer financial history for the company before we bought its shares. AI has all happened rather quickly for the business.’
Unlike most other global equity funds, Evenlode Global Equity has a sizeable part of its portfolio in UK companies, including RELX, London Stock Exchange and drinks company Diageo.
‘What is key for us,’ says Elliott, ‘is where our holdings generate their revenues. While UK companies make up 18 per cent of the fund’s assets, only five per cent of the portfolio’s revenues are derived from the UK.
In contrast, although Asia-Pacific stocks form less than two per cent of the portfolio, the region accounts for around 17 per cent of revenues.’
Total fund charges are reasonable at 0.85 per cent.
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Robert Johnson is a UK-based business writer specializing in finance and entrepreneurship. With an eye for market trends and a keen interest in the corporate world, he offers readers valuable insights into business developments.
