The £79m trust has increased its investment in Amlin, Catlin and Lancashire in the portfolio which consists of 25 of the “highest-conviction” stocks from L&G’s UK equity team holdings.
Lead manager and UK equity head Robert Churchlow established the positions at the end of last year and has been adding to them at the start of 2009. He says the demand for the types of insurance offered by the veh-icles, which include aviation, international property and casualty, marine and commercial insurance, is going to remain the same throughout the economic cycle and feels higher returns are sustainable for many years.
Churchlow says: “We intend to hold these shares for the forseeable future and believe there is quite a good upside left in the share prices. These vehicles have perfect market conditions. They are seeing rates go up and market share gains. To cope with increased demand, they are raising new equity to write new business and we believe that the return on that equ- ity will look good.”
He says that the demand for Lloyd’s syndicates has increased with the demise of AIG and the company is seeing a significant shift of business with interest in the Lloyd’s market in London and Bermuda.
L&G’s growth trust typically invests in 25 equally weighted holdings of around 4 per cent through a bottom-up company-specific stockpicking approach.
Churchlow is less bullish on banks and does not hold any in the portfolio.