Bestinvest says
It's rare to find a manager who has managed the same fund for as long as Simon Knott has. In fact he has managed the Discretionary Fund in his own distinctive style since 1990. In what can only be described as a purist approach, the manager's style provides investors access to a focused, highly researched, deep value (cheap stocks relative to net assets or growth potential) portfolio of mostly small cap stocks. Knott’s investment philosophy and his detailed knowledge of the companies in which he invests is impressive. The Manager's distinctive bottom up approach, seeking out fundamental value, has proved successful over all economic cycles.
The fund is built entirely around bottom up stock analysis with an emphasis on fundamental value. The manager does not rely on third parties to generate investment ideas or provide research and analysis. Instead he relies on his extensive market experience and he alone will undertake all analysis and company visits. He does not invest in what are perceived as 'bad' companies even if they are cheaply priced. Instead he will target those which he understands, are profitable and whose businesses have significant barriers to entry. The manager will rely on balance sheet and turnover versus margin analysis to identify value. He pursues a buy and hold strategy and will not take positions in a company that cannot satisfy an investment case over a three to four year view. This is particularly important in the small cap arena where transaction costs can be high.