UK small and mid-cap boutique Chelverton Asset Management (CAM) is planning to launch a new UK Equity Growth fund on 20 October 2014.
Dubbed as the Chelverton UK Equity Growth Fund, the new strategy will be co-managed by James Baker alongside David Taylor, Co-Manager of the acclaimed Chelverton UK Equity Income Fund.
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The fund aimsto deliver long-term capital growth by investing in companies with market caps from £25m up to, but excluding the FTSE 100.
The fund will invest in UK small and mid-cap stocks which can grow faster than GDP, are cash generative and able to fund their own growth over the investment cycle, generate high margins as well as have management teams which do not dilute shareholder returns.
The fund, which holds between 50 and 60 stocks, will invest 80% of the portfolio in solid, sensible cash generative growth stocks and remaining 20% in stocks which do not lend themselves to the screening process.
In addition, the fund will use a quantitative screen that seeks for strong cash flows, good revenue growth, low gearing high gross margins and low working capital intensity to reduce the universe to a more manageable 200 stocks from a universe of 1,000 small and mid-cap stocks.
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By GlobalDataDavid Taylor said: "To do so we needed to build the investment team, and having known James – a proven stock picker in the Small and Mid-Cap space – for many years, we were delighted when the opportunity presented itself to bring him on board, his appointment creating the opportunity to launch the new Growth Fund."
