Where have you recently been finding value?
"It is becoming increasingly difficult to find value across the market, clearly valutations have moved ahead and the market has had a good run. Over the past 10 years we have had eight up years for the UK stock market, so it is becoming more difficult to find good opportunities."
"Last year there was a very clear opportunity in the large cap end of the market. This year we are finding more opportunity in the mid cap end of the market."
“There are areas, particularly in terms of shareholder returns, where management teams are paying closer attention to what shareholders are looking for. The cash they are generating, they are finding difficult to deploy and therefore they are using shareholder returns through buybacks or increased ordinary dividends or special dividends – they are rewarding shareholders with that cash for their loyalty.”
“Across the FTSE 250 there are a number of areas that look interesting; the house building sector with its dividend profile looks very interesting to me. There is a bit of M&A activity coming back to the market. Last year was a decent year but 2015 could prove to be a better one in terms of volume.”
“The special situations always exist within the market where things have been overlooked. A case in point would be Essentra, which we own. It is an opportunity where acquisitions have been made and there is a good opportunity to take out costs and really drive returns over the months and years ahead.”
You have recently moved into mid caps, why?
"The mid cap space offers some very attractive opportunities at the moment. There are companies offering good dividend growth profiles. There are areas where we see the opportunity for increased M&A activity particularly with lots of cash-rich US companies and with the dollar being as strong as it is these companies offer the ability to grow market share."
"Despite their valuations being reasonably high, they are going to be attractive long term prospects for some of these businesses."
Will the market continue to favour bond proxies?
"‘Bond proxies’ have had a strong run in 2015 continuing where they left off in 2014. The attractions are clear to be seen and stable earnings and cash returns will appeal to a lot of investors.”
“The key issue for that sector in aggregate is valuations. We have recently sold our holding of Unilever because we are struggling to see the upside in a share that is trading on a multiple in excess of 20 times earnings with minimal growth in the near term.”