CA's Activist process is working27 Oct 2021 05:05
ACTIVIST PROCESS
The Fund originates ideas from its screening processes and its network of contacts, including its shareholders. Companies are valued with focus on their replacement value, cash generation ability and balance sheet strength. During the process, the Fund's goal is to examine the company both 'as it is' and under the lens of 'as it could be' to maximise shareholder value. Investments are normally made after an initial engagement, which in some cases may have been preceded by the purchase of a modest position in the company, to allow the Investment Adviser to meet the company as a shareholder. Engagement includes dialogue with the company chairman and management, and normally also several non-executive directors, as we build a network of knowledge around our holdings. Site visits are undertaken to deepen our research and, where appropriate, independent research is commissioned. Investee company annual general meetings are often attended to maintain close contact with the board and other stakeholders.
For all portfolio holdings, the Fund strives to develop an activist angle and aims to contribute to the companies' strategy. Where value is hidden or trapped, the Fund looks for ways to release it. The activist approach in some cases requires long holding periods, which facilitate effective engagement.
Most of the Fund's activism takes place in private, but we are willing to make our concerns public when appropriate. The response of management and boards to our suggestions has generally been encouraging. We remain determined to ensure that our investments deliver their full potential for all shareholders, and are committed to engage to the degree required to achieve this.
The opportunities for engagement with management are supported by a continued improvement in the corporate governance of UK listed companies, and the positive perception of active ownership in government reports such as the Kay Review. Amongst under-researched or misunderstood UK small and mid-cap companies, the opportunities to deliver gains by focusing on shareholder value are promising.
This is what they do and are doing with HUR...... magnificent awareness in the first instance followed by action to benefit its shareholders and hence the shareholders of HUR
GLA
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