Trustnet Magazine 83 April 2022 | Page 38


The power of people

The value of shares in Scottish Mortgage , and any income from them , can fall as well as rise and investors may not get back the amount invested .
Access to entrepreneurs , visionary founders and academics powers the thinking of the managers of the Scottish Mortgage Investment Trust as they seek to unearth exceptional growth companies . Their success is rooted in identifying and investing in the outliers of tomorrow – those companies capable of returning five , 10 , 15 or 20 times the initial investment over a five- to 10-year period . It ’ s a strategy that has made the trust one of the most successful of the past decade and catapulted its assets to more than £ 18bn , making it by far the largest investment trust in the UK . Much of that success is down to the team ’ s network of connections within business and academia , which it has forged and strengthened over many years . This has put it in a privileged position to spot these breakthrough companies before they get on the radar of other investors . One recent example is an investment trip to Berlin , when the managers spent five hours of face time , including dinner , with the founders of online fashion retailer Zalando . “ That is quite anomalous in terms of the level of access ,” said deputy manager Lawrence Burns . “ It ’ s not just quantity of time , but also the nature of that time . When you build relationships with people that are more like partnerships , you get more open conversations . They ’ re more willing to talk about ideas , ambitions , aspirations earlier .” The reputation that Scottish Mortgage has established as a supportive and steadfast shareholder over the long term – sticking with transformative growth companies through the good times and the bad – gives company directors trust and reassurance .
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E ACTUALLY BE EN YOU REACH REMENT? YOUR PORTFOLIO Ronald Chan, Chartwell Capital Edvantage Edvantage is a stock yet to return to favour among investors, but Ronald Chan, founder of Chartwell Capital, believes this is just a matter of time. The company operates private universities and vocational schools. It has plunged close to 60% since last July, after the Chinese Communist Party targeted the private education sector. However, this was primarily focused on private tuition of school- age pupils. Edvantage issued a statement in October pointing out the government “supports and encourages listed companies that conduct vocational education”, and released a positive profit alert earlier this year. Chan is most excited about its foothold in the Greater Bay Area. “The supply of students is plentiful in the region,” he notes. “One of the cities, Guangzhou, has 1.3 million students, making it the biggest college city in the world. Demand will also be plentiful, given the increasing demand for vocational training and / 38 / Turnaround stories high-skilled employees in Shenzhen, which is positioned to be the Silicon Valley of China.” Total enrolment grew at 40% a year between 2019 and 2021, while revenue is expected to grow at 25% per annum in the next three years. “Edvantage has a healthy balance sheet, with net debt-to-equity of 7% and unrestricted liquidity of RMB1.2bn [£145m],” Chan adds. “It is trading at a P/E multiple of 6x. The company should have an upside potential of at least 50%, and if investors return to this sector, it may get a boost from a re-rating.” HOW BIG WILL YOUR CAKE ACTUALLY BE WHEN YOU REACH RETIREMENT? You’ve hit or are about to reach the Big 5-0. Or should that be the Big 5-Oh...? That’s the age many of us realise – “Oh, I need to start investing for retirement.” Not sure where to begin? Don’t worry, our selection of helpful resources will support you every step of the way. So start your retirement planning now. It’s got to be better than waiting for the Big 6 Oh-No – when you realise you’ve left it too late. Smart retirement planning starts with you – and Janus Henderson. For promotional purposes Not for onward distribution. The value of an investment and the income from it can fall as well as rise and you may not get back the amount originally invested. Not for distribution in European Union member countries. Issued in the UK by Janus Henderson Investors. Janus Henderson Investors is the name under which investment products and services are provided by Janus Capital International Limited (reg no. 3594615), Henderson Global Investors Limited (reg. no. 906355), Henderson Investment Funds Limited (reg. no. 2678531), Henderson Equity Partners Limited (reg. no.2606646), (each registered in England and Wales at 201 Bishopsgate, London EC2M 3AE and regulated by the Financial Conduct Authority) and Henderson Management S.A. (reg no. B22848 at 2Rue de Bitbourg, L-1273, Luxembourg and regulated by the Commission de Surveillance du Secteur Financier). Janus Henderson, Janus, Henderson, Intech, VelocityShares, Knowledge Shared, Knowledge. Shared and Knowledge Labs are trademarks of Janus Henderson Group plc or one of itssubsidiaries. © Janus Henderson Group plc.