James SullivanInvesting in Asset Management companies can be a fickle business; the sector is often geared in to equity markets, carry material key person risk and margins are being squeezed. Yet we have been very active in this theme within our Optimal Multi Asset Opportunities fund.

We believe it is a sector that lends itself not to a passive buy and hold strategy, but a momentum led trading strategy, using undervalued companies as an operationally geared play on over sold markets. This was a powerful combination witnessed in Q4 2018 in to Q1 2019. Many companies in this sector had a torrid 2018 in share price terms; valuations troughed and yields spiked. Pair this with a global stock market that also re-rated, it was an opportune time to get back involved.

3 examples of where we have traded such companies in the recent past (green dots highlighting entry or top up, red dots an exit or reduction):

Miton Group was materially undervalued by the market relative to its peer group. The momentum in sales and the progressive dividend policy is only now being recognised by the market. The company remains a small player in a big boys market, so there is always the optionality of a takeout further down the line should they fail to fulfil their potential. The re-rating of the company in recent weeks has moved the valuation closer towards fair value. We have taken profits, but remain holders.

Source: Bloomberg; MitonOptimal


Jupiter was a company that we traded within a very short time period, locking in a short term but valuable profit when they reported their numbers. The yield become too attractive to ignore, whilst a change of management had given the stock fresh impetus. There remain questions marks over succession planning in two or three of their prized teams, which is likely to weigh on the price until resolved. We await a possible re-entry on weakness or visibility of growth.

Source: Bloomberg; MitonOptimal


Gresham House restructured in 2014 and is now a relatively unique beast in that its focus is on alternative investment strategies, including forestry and renewable energy. The company doesn’t have a great deal of competition in this area relative to mainstream asset managers, whilst industry talk of ethical investing has never been louder. Having just paid its maiden dividend, the future looks bright. We remain buyers on weakness.

Source: Bloomberg; MitonOptimal



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MitonOptimal UK Limited is part of the MitonOptimal group of companies. MitonOptimal UK Limited is registered in England and Wales No. 09138865. Authorised and regulated by the Financial Conduct Authority.

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