Launched in March 2020, this UK equity fund seeks to maximise returns to investors over the long-term, by aiming to invest in 25-40 positions across the market cap spectrum. The fund is considered ‘unique’ because it invests in businesses that can achieve above average returns on capital, based on a sustainable competitive advantage.
Rosemary explains what makes an opportunity 'unique'.
Your capital is at risk and you may not get back the full amount you invested. Investments in this fund are for the long term and higher risk compared to investments solely in larger, more established companies. Please read full details of the risks here.
What do I need to know before investing?
Where and how is my money invested?
The investment objective of the fund is to achieve real growth in capital and income over the long term, defined as a minimum investment horizon of five years.
At least 80% of the fund will be invested in UK equities, with an emphasis on small and medium capitalised companies.
Rather than buying and selling for short term profit, we make investments at valuations we believe will provide shareholder value over the intended long term period of investment.
We adopt a focused approach to investing in the shares of businesses with clear and sustainable competitive advantages that are difficult to replicate, which can create high barriers for new entrants and generate superior returns on operating assets. In addition, these companies are likely to possess sound finances and experienced management teams focused on the creation of long term value for shareholders.
What's the investment process?
Our typical investment process is laid out below:
- We look for business models that are easy to understand and to explain.
- We seek evidence that high returns on equity can be achieved without undue financial leverage.
- Important factors are identifiable, sustainable barriers to entry for potential competitors and high margins, especially gross margins.
- We prefer organic growth or, if growth is achieved by acquisition, we look for evidence of capital discipline.
- We like management teams that deliver shareholder value.
- We like profits that convert quickly into cash.
- We look for a free cash flow based valuation that offers a good return and a margin of safety for error.
What are the risks?
Our investment funds are not suitable for everyone, so we recommend seeking financial advice. This fund may not be appropriate if you plan to withdraw your money within five years. As with all investments, there are risks you should be aware of and comfortable with before you invest.
- The value of your portfolio can go down as well as up so your capital is at risk and there is no guarantee you will get your investment amount back.
- This fund has a small and mid-cap bias. Investments in smaller companies are generally higher risk compared to investments in blue chip companies.
- The past performance of our fund is not a reliable indicator of future results.
Please note that this is only a brief overview of the risks involved with investing in the VT Downing Unique Opportunities Fund. Please read full details of all the risks here before investing.
What are the charges?
The charges you pay go towards the costs of running the fund, including the costs of marketing and distribution. These charges reduce the potential growth of your investment.
- Annual management charge: 0.75% per annum
This percentage is based on the net asset value of the sub-fund attributable to the relevant share class (plus VAT if applicable). There may be further charges for buying and selling assets for the fund and 'dilution levy' costs associated with entering or exiting the fund. This is to cover costs associated with your transaction. However, your ongoing charges are capped at 1.00% per annum. Please see the prospectus for more information.
- Performance fee: None
Who is the team behind the VT Downing Unique Opportunities Fund?
The fund is managed by award-winning* Rosemary Banyard. Rosemary began her career with James Capel & Co where she was a senior investment analyst for 12 years before becoming a Fund Manager at AIB Govett.
Rosemary rose to prominence and developed a reputation as one of the leading female fund managers in the UK when she joined Schroders in 1997. For almost 20 years, she was known for running the acclaimed Schroder UK Smaller Companies Fund with Andy Brough, and was for many years lead manager of the award-winning Schroder Mid Cap Fund Plc, as well as heading up several other segregated UK equity mandates, managing total assets of around £1 billion.
In 2016, Rosemary joined Sanford DeLand to launch and manage the Free Spirit Fund. The Schroder UK Mid Cap Fund Plc returned 17%** per annum while Rosemary was manager and in her two and a half years managing money at Sanford DeLand the Free Spirit Fund returned 31%***.
Rosemary is supported by the Downing Fund Managers team, which was established in 2010 by award-winning**** Fund Manager Judith MacKenzie. Judith heads up the nine-strong team who manage over £184 million in publicly listed assets (as at 29 February 2020). The investment team have many years’ experience across both private and public equity markets.
Downing Fund Managers is a boutique asset management business, drawing on Downing LLP's 30-year venture capital track record.
Our investment committee draws on a significant number of years investment experience to provide risk oversight on new investments and portfolio management.
*Investment Week – Best UK Growth Trust 2013 & 2014. Outstanding Industry Contribution Award 2015.
** Schroder UK Mid Cap Fund Plc, Annual Reports & Accounts 2015.
*** Financial Express as as 28 June 2019.
**** Named Small Cap Fund Manager of the Year, Small Cap Awards 2015 and Small Cap Awards 2013 for the Downing UK Micro-Cap Growth Fund.