ADVERTORIAL FEATURE
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 .
/ 20 / trustnet . com
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 / trustnet.com
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?
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Smart retirement planning starts with you –
and Janus Henderson.
www.janushenderson.com/retirementgateway
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