Mark Hawtin has built up an impressive record on this fund since its launch in 2011. He has a proven record in the sector, running a technology hedge fund at GAM and having previously run a technology hedge fund at Marshall Wace. He demonstrates strong knowledge of his stocks and the IT industry generally. He invests across the market cap spectrum, favouring faster growing companies, but also has the flexibility to invest in more mature names if he finds their valuations attractive.
The manager starts by identifying industry themes with multi year growth potential, then look for stocks that will benefit from these themes. Sector research includes speaking to industry names, such as chief technology officers, to see how technology is being used and how this is changing. The team carry out fundamental analysis using a “traffic light” system based on 5 factors - competitive advantage, management, pricing power, growth and valuation. The team create their own valuation models uses various factors including discounted cash flow - there can be up to 6 models per company based on different scenarios for its future. The manager looks for at least 50% upside in a stock, but valuation is not the key factor in stock selection. Good management is important - Hawtin won’t invest in companies he considers to have bad management, even if he likes the product.
The manager also make extensive use of technical analysis.