Special Situations Fund - CRUX Asset Management London - Investing in Special Situations Fund
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  2. Funds
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  5. News
  6. Contact
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TM CRUX UK Special Situations Fund

Richard Penny has managed the TM CRUX UK Special Situations Fund since launch in September 2018.

The Opportunity

The TM CRUX UK Special Situations Fund favours shares which it considers to be undervalued due to the specific situation of the relevant company, its group and/or any member of its group. It may be that the relevant company is subject to recovery action, management change, strong potential growth, is undervalued or is refinancing or it may hold assets which the Investment Manager considers to be undervalued. The Investment Manager is not restricted in its selection of investments for the Fund by any geographic or industry specialisation.

The TM CRUX UK Special Situations Fund complements the existing TM CRUX UK Core Fund, as well as having an investment process similar to the TM CRUX European Special Situations Fund.

The Fund aims to achieve the investment objective by investing at least 80% of the value of its scheme property in shares listed on UK securities markets in companies that are incorporated or domiciled in the UK. These companies may or may not be headquartered in the UK and may or may not have a significant part of their business activities in the UK. 

FUND NAME TM CRUX UK Special Situations Fund
FUND MANAGER(S) Richard Penny
LAUNCH DATE 1 October 2018
status UK – UCITS
STRATEGY Long only equities
REGULAR SAVINGS Yes, only Class I: £100 per month minimum

The scheme property of the Fund will be invested in listed companies with any market capitalisation except that no more than 40% of the scheme property of the Fund will be invested in: (i) small companies or (ii) companies listed on the Alternative Investment Market. A small company means a company with a primary listing on the London Stock Exchange whose market capitalisation is lower than that of the largest 350 companies by capitalisation which have their primary listing on the London Stock Exchange. In very broad terms, market capitalisation means the value of a company that is traded on the stock market.

The Fund’s portfolio will be managed on a concentrated basis. Whilst increasing the potential reward, the nature of this funds can increase risk. As such, the returns may be more volatile and will be impacted more by fluctuations in the value of underlying stock.

The Fund may also invest in cash and cash-like instruments (including money market instruments and deposits), warrants and exchange traded derivatives. Derivative transactions may be used for the purposes of meeting the investment objective of the Fund as well as for hedging purposes, although it is not anticipated that the Fund will use this power to enter into derivatives at present.

The Investment Manager may adjust the Fund’s exposure to certain asset classes and investment types in response to adverse market and/or economic conditions, when, in the Investment Manager’s opinion, it would be in the best interests of the Fund and its shareholders to do so; this is expected to be for short periods of time.

Investors should note that while the investment objective of the Fund is to achieve long term capital growth there may be situations in which an income return is also achieved.

The manager of the TM CRUX UK Special Situations Fund, Richard Penny, believes there are two ways to find businesses that are mispriced by the market:

  1. Buying a value situation, these could be distressed situations where confidence has been lost by the market and people, but where Richard has assessed the upside and believes that there has been a market overreaction.
  2. Where premier businesses that are better value creators can compound returns and grow strongly, where we believe it is not priced in by the market, this will tend to be in the more large and mid cap stocks within this portfolio.

For both ways finding an attractive entry point is central to the process.

This process means that often stocks in the TM CRUX UK Special Situations Fund will typically have these characteristics:

  • High quality business with low levels of debt;
  • Companies run by strong management teams, often with proven track records with meaningful amounts invested in the companies they run;
  • Businesses which have an economic advantage with the potential for high returns on capital and growth;
  • Businesses with a strong geographic exposure, not just focused on the UK market.
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Fund Objective

The investment objective of the Fund is to achieve long-term capital growth, which should be viewed as 5 years or longer.

Fund Manager

Richard Penny
Richard has been managing the TM CRUX UK Special Situations Fund since its inception.

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