In the autumn of 2020, Craig Bonthron, Neil Goddin, Jonathan Parsons and Ryan Smith departed Kames Capital to join Artemis, with the intention of launching and co-managing global equity funds with a focus on positive impact.
At the beginning of April, the former co-managers of the Kames Global Sustainable Equity, Global Equity Market Neutral and Global Equity funds debuted the Artemis Positive Future fund with their new employer.
The unconstrained portfolio of 35 to 45 holdings across global equities focuses on disruptive companies, primarily within the small- and mid-cap space, creating “transformational change” in their sectors and in society.
How does Artemis Positive Future compare to strategies your team previously managed at Kames and how will it differentiate itself from existing impact funds?
What we have here is really differentiated. We have less than 5% overlap with most of our peers in terms of the stocks in the portfolio, 70% of the stocks in the portfolio are classed as small and mid caps, and the median market cap of the fund is £4bn.
As was the case at Kames, it is a very high conviction strategy. We have an active share of around 99.5% versus the [MSCI All Country World] index, which is something I do not think any competitor could claim.
We are also genuinely bottom up. Many approaches come from a thematic or top-down perspective – a focus on renewables, for example. We are trying to find differentiated companies that are underappreciated and emerging growth, which is something that is very different from what is available in the market.
It is always important to be different, as long as it is in a good way. Within our space, being different is good but being right is key.
The fund is based on an underlying philosophy that ‘the 20th century consumer-industrial complex is being disrupted’. How does that translate to investment opportunity?
The rate of change from an innovation perspective is accelerating and there are significant problems in the world, which we cannot turn a blind eye to and which need to be solved.
At the intersection of those two things, creative and innovative companies have the potential to create significant economic value – not just to capture that value but to create value for society at large. It is a once-in-a-generation, perhaps longer, opportunity for innovators looking to capture value at that intersection.
While the strategy is bottom-up, given that philosophy, are you able to identify particular sectors or regions where you would expect most investment opportunities to spring from?
We are looking for innovation, wherever it springs, and for companies that are genuinely trying to create value at that intersection. So it could be anywhere and we are keeping our minds open.
Some of the biggest positive impact opportunities we have found are second order impacts or are non-obvious.
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