Bestinvest says
The investment philosophy emphasises capital preservation, with the managers seeking to invest in stocks trading at a discount to their intrinsic value. Therefore the fund is very stylistic in nature and as such is likely to underperform when "value" stocks are not being recognised by the market. Additionally investors should also consider the added risk of returns being hurt during periods of dollar strength (because of the US$ currency hedge). Therefore we do not consider this fund a core investment for US exposure.
The fund's investment style emphasises absolute value (companies trading below their intrinsic value) with downside protection rather than relative value (cheap within the industry peer group). Stock specific issues tend to drive returns rather than general market direction. The fund generally invests in companies trading at a discount to their value measured using private equity valuation metrics; merger arbitrage opportunities and distressed securities also feature in the portfolio. The managers look for catalysts to unlock value and may become activist if they think it necessary, that is applying shareholding pressure on company management. The fund may build substantial cash/fixed interest positions if the managers are unable to identify sufficient investment opportunities. It also invests in non-US equities (up to 20% of the value of the fund), though country and sector weightings are the result of stock selection. US$ equity positions are generally hedged to sterling.