Companies: BETB    INT    MRP   

Discussing the objectives of the fund, which invests in smaller UK companies with a particular focus on AIM, Robertson notes that he tries to produce absolute performance for investors. ‘I took over the management of the fund two years ago and it was a lot more index-aware before. Now I’m trying to make people money rather than cosy up to benchmarks; therefore the returns can be a bit more volatile.’

Streamlined since Robertson took over management duties, the portfolio now consists of approximately 40 holdings. ‘About 30 are actively traded and the others are either too small to make an impact or are in the process of being sold,’ he says. In terms of market volatility, he adds, ‘We concentrate on special situations, which will be fine, and we tend to go for clever companies in well-defined industries.’

Sound investment decisions
When identifying new investments, Robertson prefers more seasoned stocks to ‘the latest hot story’, arguing that returns are more attractive with the existing stocks available in the sector, such as those requiring follow-on capital. One such venture is AIM-listed mining concern Mahgreb Minerals, a new addition to the portfolio focused on zinc and lead exploration and production in North Africa. ‘It pretty much has free reign to operate as there is not much in the way of competition,’ Robertson says. ‘We were involved in a fundraising for the company three or four months ago and the share price has not done a lot since, but we think it is a good opportunity.’

Robertson also recently made a follow-on investment in Meridian Petroleum, another AIM-quoted resources stock, being an oil and gas exploration and production company focused on the US and Australia. Basic materials/resources is one of three main investment areas for the fund, making up roughly 35 per cent of its holdings. In addition, Robertson invests in the consumer services sector, typically accounting for 25 per cent of the portfolio, and healthcare, usually covering the bulk of the rest - currently 14 per cent. He also invests a ‘scattering’ in technology and financials.

Backing the bookies
Within consumer services, Robertson highlights Betbrokers, a sports betting brokerage that acts as an interface between betting shops. ‘It allows them to lay bets on with the competition, without actually having to have contact,’ he explains. The firm, which Robertson claims currently has no competition in the UK market, has just acquired a similar company in the US called Winning Edge, which will allow Betbrokers’ European customers to obtain real-time US sports information and extend their trading day. The acquisition will give Betbrokers access to Winning Edge’s database of more than one million customers.

A healthcare holding within the fund is International Medical Devices, a producer of high-volume, low-margin medical products such as syringes. ‘They produce a safety syringe that makes it almost impossible for syringe-related industrial accidents to occur,’ Robertson says. ‘With the amount of compensation paid out by the NHS each year for syringe-related injuries, it seems very likely that the service will take this product up. But this will probably be a slow process!’

SVM co-founder Robertson has been working in investment management for 25 years and ‘has had experience of different cycles â“ up and down â“ and nothing ever surprises me now’. Given his view that recent market volatility won’t affect the fund, only time will tell whether he can continue to manage the portfolio without any nasty surprises knocking his performance off course.