“We are not interested in tick boxers. Instead we seek purposeful companies that make this world a better place” – Founder and CIO Melwin Mehta
We look beyond ESG presentations. We are aware of a growing trend of “greenwashing” because it looks “good.” We dislike tick boxers. We always have. For us, ESG considerations are a basic operating system for any business that wants to survive, let alone thrive in the times ahead. Some managements may see it as a necessary evil (green washing) while those that are blessed with a long-term mindset will ably capitalize on the emerging opportunities taking their companies to the next level.
Our companies may be asset rich or growing, serving a niche. Some of our companies are leaders and have an advantage over the competition while others are challengers, going after an industry leader or even expanding the addressable market. Each company is analysed differently because each company is unique in its own way.
We access our network of analysts, industry specialists, and investors to cross-check and learn. We invest across sectors and mention a few below.
We are a signatory to the internationally-recognized Principles for Responsible Investment and are fully committed to action them in our investment decisions.
We also recognize that applying these Principles may better align investors with the broader objectives of the society. Therefore, where consistent with our fiduciary responsibilities, we commit to the following:
Principle 1 : We will incorporate ESG issues into investment analysis and decision-making processes.
Principle 2: We will be active owners and incorporate ESG issues into our ownership policies and practices
- Principle 3: We will seek appropriate disclosure on ESG issues by the entities in which we invest.
Principle 4: We will promote acceptance and implementation of the Principles within the investment industry.
Principle 5: We will work together to enhance our effectiveness in implementing the Principles.
Principle 6: We will each report on our activities and progress towards implementing the Principles.
“We Invest In Purposeful Companies That Make This World A Better Place” – Melwin Mehta
We look beyond ESG presentations. We are aware of a growing trend of “greenwashing” because it looks “good.” We dislike tick boxers. We always have. For us, ESG considerations are a basic operating system for any business that wants to survive, let alone thrive in the times ahead. Some managements may see it as a necessary evil (green washing) while those that are blessed with a long-term mindset will ably capitalize on the emerging opportunities taking their companies to the next level.
Our companies may be asset rich or growing, serving a niche. Some of our companies are leaders and have an advantage over the competition while others are challengers, going after an industry leader or even expanding the addressable market. Each company is analysed differently because each company is unique in its own way.
We access our network of analysts, industry specialists, and investors to cross-check and learn. We invest across sectors and mention a few below.
We are a signatory to the internationally-recognized Principles for Responsible Investment and are fully committed to action them in our investment decisions.
We also recognize that applying these Principles may better align investors with the broader objectives of the society. Therefore, where consistent with our fiduciary responsibilities, we commit to the following:
Principle 1 : We will incorporate ESG issues into investment analysis and decision-making processes.
Principle 2: We will be active owners and incorporate ESG issues into our ownership policies and practices
- Principle 3: We will seek appropriate disclosure on ESG issues by the entities in which we invest.
Principle 4: We will promote acceptance and implementation of the Principles within the investment industry.
Principle 5: We will work together to enhance our effectiveness in implementing the Principles.
Principle 6: We will each report on our activities and progress towards implementing the Principles.
We Invest Across The Sector
HeiQ is improving the lives of billions of people by adding functionalities to all kinds of textile materials.
HeiQ is a Swiss-based company providing world-class technology that adds functionality to textiles, offering benefits such as improved cooling or warming, water repellence, odour prevention, air purification, antiviral, antibacterial, and antifungal protection. With the size of the global textile chemical market estimated at $25bn, HeiQ has a large addressable market, with plenty of growth potential. Across its various technologies, HeiQ now serves over 300 household brands, including IKEA, M&S, Burberry, and even Cornelia James, supplier of gloves to Her Majesty the Queen.
HeiQ has developed several technologies with 300 major brands and continues to invest in R&D which has won multiple awards.
Dr. Martens is an iconic footwear brand loved by its multi-generation obsessive fans.
Our Fund was launched in 1963 and there aren’t many companies who are “senior” to us. Dr Martens is. The company launched its first boot in 1960 and remains an iconic brand even today.
Dr Martens is a British company that designs, develops, and sells footwear. The Company operates in America, Europe, and Asia-Pacific with product categories that include Originals and Fusion. Though it operates in over 60 countries globally, its new “digital first” strategy is gaining traction while it takes back operations from franchisees.
The company’s IPO in January 2021 enjoyed the backing of a who’s who in the banking world: Morgan Stanley, Goldman Sachs, Barclays, BofA, HSBC, and RBC. It was a well-marketed IPO (at 370p) but it was probably overpriced. We kept track of developments from a distance. Fortunately, the market has given us an opportunity to buy those very shares at depressed “recession” valuations.
hVIVO is a niche tester of vaccines and antivirals of infectious and respiratory diseases.
hVIVO is a clinical research organisation in human challenge study clinical trials that large recognisable pharmaceutical organisations use to validate the efficacy of their vaccines and other antiviral products. After recent wins, the company’s unique portfolio has expanded to 11 human challenge models.
hVIVO’s expertise in challenge studies has come into its own in the face of the COVID-19 pandemic and, in October 2020, it secured a contract with the UK Government for the development of a human challenge study model for COVID-19. The company has successfully won contracts in other respiratory diseases and malaria – moving beyond COVID.
hVIVO runs challenge studies in London from its Whitechapel quarantine clinic, its state-of-the-art QMB clinic with its highly specialised on-site virology and immunology laboratory, and its clinic in Plumbers Row. To recruit volunteers / patients for its studies, the Company leverages its unique clinical trial recruitment capacity via its FluCamp volunteer screening facilities in London and Manchester.
Morgan Advanced Materials (MAM) plays an important role in manufacturing in a more sustainable world.
MAM are global manufacturers of advanced carbon and ceramic materials solving complex problems for their customers. The company’s product line includes high-temperature insulation products used to reduce energy consumption, electrical carbon, linear and rotary transfer systems used for transferring electrical energy in motor and generator applications, seals and bearings, ceramic cores, piezoelectric sensors and transducers, crucibles, and others. The company’s customers come from sectors including healthcare, petrochemical, transportation, electronics, energy and other industrial applications.
The transformation of the business in the past decade has helped it grow exponentially. MAM is well positioned in attractive, growing markets where differentiated products are valued by consumers helping them deliver strong organic growth.
As one of the UK’s largest food businesses, the company owns some of the nation’s most loved and iconic brands.
Premier Foods trades from 15 sites, and predominantly operates in the ambient food sector which is one of the largest sectors in the domestic grocery market. Premier estimates that approximately 94% of UK households buy one or more of its products every year.
In July 2022, the company acquired The Spice Tailor, a premium authentic Indian and South East Asian recipe kit maker for £43m. The brand was complementary to the Group’s Sharwood’s and Lloyd Grossman brands and will benefit from Premier’s wide distribution network. In times like these, while consumers are conscious of what they spend in restaurants and takeaways, it seems Premier’s trusted and iconic brands including Mr Kipling, Bisto and Homepride continue to be in high demand.
CEO Alex Whitehouse has done a fantastic job since taking the helm and if the market fails to value the company properly, it may well fall into the hands of private equity.
Strix is a global leader in kettle controls with a 56% market share.
Strix is the global leader in the design, manufacture, and supply of kettle safety controls complementary water temperature management components, appliances, and water filtration products. For over half a century they have used their presence for a greater good by constantly pushing boundaries to create and deliver the right solutions for the customers which are the most trusted and reliable technology in the world.
The wide portfolio of products and brands in various segments like baby care, food prep, controls purification, etc has featured in leading brands around the world. Whether it is a kettle, a formula maker or a water filter, brands choose Strix Technology because it is Safer By Design.
With their recent acquisition of LAICA in October 2022, delivery of record sales by the Aqua Optima brand for yet another year, Launch of the Halo Pure technology, followed by a contract obtained in China recently and the evolution of this technology to farming solutions for clean drinking water it has proved to be a year of significant incremental business opportunities and growth for Strix.
Victrex is an innovative world leader in high performance polymer solutions.
Victrex is an innovative world leader in high performance polymer solutions, focused on the strategic markets of Automotive, Aerospace, Energy & Industrial, Electronics and Medical. With over 40 years of experience, they develop world leading solutions in PEEK and PAEK based polymers, and selected semi-finished and finished parts which enable environmental and societal benefits for stakeholders.
Every day millions of people rely on sustainable products and applications which contain the polymers and materials from Victrex. Victrex is committed to bring transformational and sustainable products which address the world’s material challenges, every day with sustainability embedded in its culture thoroughly.
Hill & Smith is an industry leading provider of highway safety products and services.
Hill & Smith (HILS) has three main business divisions: Galvanising services which increases the sustainability and maintenance free life of steel products including structural steel work, bridges among others infrastructure markets.
The Engineered Solutions arm supplies engineered steel and composite solutions with low embodied energy for a wide range of markets including power generation, rail, marine and housing. The third division is the roads and security arm which supplies products and services to support road and highway infrastructure including temporary and permanent road safety barriers.
The company was founded in Brierley Hill, in the West Midlands, by Edward Hill in 1824 but today derives 64% of operating profits from United States. It has truly changed with the changing times and continues to grow organically as well as bolt-on acquisitions.
Hargreaves Services delivers a diverse range of services and has embedded asset value.
Hargreaves has three business segments: Services, Hargreaves Land and an investment in a German joint-venture, Hargreaves Raw Materials Services GmbH HMRS. The Services arm provides critical support to many core industries such as Energy, Environmental, UK infrastructure as well as certain manufacturing industries. The land arm is focused on the sustainable development of brownfield sites for both residential and commercial use. Finally, the HMRS business trades in specialist commodity markets and owns DK Recycling which is a specialist recycler of steel waste material.
With £18m cash and the NAV per share at 603p we believe there is further hidden value in its land bank.
It is worth highlighting some of the group’s defensive characteristics also – in the Services arm it has over 50 term and framework contracts, most of which have inflation related escalation clauses – giving a great hedge against the current high inflation environment.
The UK Stewardship Code (“The Code”) was first published in July 2010, revised in September 2012 and January 2020.
It promotes effective stewardship in the UK setting out good practices for institutional investors and asset managers. Stewardship activities include monitoring assets and service providers, engaging issuers and holding them to account on material issues, and publicly reporting on the outcomes of these activities.
Sterling Investment Management Limited fully supports and follows the objectives of the Code, although considers that it is not necessary for the Firm to be a signatory at this time. This decision is kept under review and should circumstances necessitate we will update our website to announce a change.
Disclaimer
The companies mentioned above are not a recommendation.
The companies listed above represent a sample of our holdings and we encourage you to visit the relevant company websites for the latest and most precise information. Their mention here is for illustrative purposes only, to demonstrate our diverse range of investments. Any mention of any company should not be taken as a recommendation or otherwise.
Over the last fifty-plus years of the Fund’s existence, we have invested in many companies across several industries. The companies mentioned above reflect our investments as of 23 April 2021 and are subject to change, anytime and without any announcement or notice, due to corporate activity or general portfolio operation.