Nigel Thomas, who manages the Framlington UK select opportunities fund, has possibly the best long-term record in the industry. He has been a top performer for more than 20 years with Hill Samuel, Carrington Pembroke – subsequently ABN Amro – and now with Framlington.
His fund is up by over 50 per cent this year against the average UK all companies unit trust performance of 26 per cent and the 18.3 per cent rise in the FTSE 100.
Between 1996 and 2001, the Solus special situations fund outperformed all other UK all companies funds while the ABN Amro fund, which he managed for the next 12 months, was ranked fourth out of 272 funds over the period.
He has certainly not lost his touch. His fund is well up into the top 20 out of 280 funds in the UK all companies sector since he started managing it. He has achieved this success by focusing on themes including recovery stories, growth and value plays and new issues.
He looks for companies with strong cash flows, high barriers to entry, pricing power, honesty of management and fundamental valuations. At present, he very much likes oil and gas stocks including Cairn Energy, Shell and BP. He also likes some basic industries which were starved of capital in the 1990s and are now experiencing pricing power as global growth creates some supply-side bottlenecks.
He invests mainly outside FTSE 100 companies, which now account for around 25 per cent of the fund. About 30 per cent of the fund is invested in FTSE 250 companies, with smaller companies representing the balance.
Despite the problems in the Middle East, he believes there are many good opportunities in the UK. Investors should be very happy investing in this fund over the next few years.