Bestinvest says
Tom Dobell is just the 3rd fund manager in this fund’s 40 year history, and has built a strong record over his tenure. He benefits from a similarly long term time frame to investment - he can buy out of favour companies at low valuations, even if recovery is years away. Close relationships with company management, often aided by M&G’s corporate finance team, place him in a good position to judge which businesses are likely to bounce back. The fund has grown considerably in recent years, but this is not necessarily an issue – Dobell is often buying shares when nobody else wants them, then selling years later into a buoyant market. However, we are monitoring assets under management closely.
The fund invests primarily in UK equities of all sizes, including those on the AiM market. Some overseas companies will also be included, though these are primarily London listed and manager Tom Dobell has a preference for English speaking management. Dobell focuses on troubled companies where a good management team is making concerted efforts to turn the business around. These can include companies in operational or financial difficulty, those with new management, restructuring stories or those that are simply out of favour with the stockmarket. Ideas are identified through company meetings and visits as well as internal and external research. In valuing businesses the manager considers fairly standard metrics, but even these are often of less relevance as he often buys loss making companies. He places greater emphasis on building relationships with company management, sometimes in conjunction with M&G’s in-house corporate finance team, and gaining an in-depth understanding of the business. He aims to have a holding period of between three and five years – typically the portfolio will have a balance of stocks in various stages of recovery.