Strategic Equity Capital - Confident despite short term setback
Strategic Equity Capital – Confident despite short term setback
After a strong period of performance in 2017, when Strategic Equity Capital (SEC) beat a strong small cap index by 6%, 2018 has proved more problematic.
Short-term performance has been impacted by stock specific price weakness within SEC’s concentrated portfolio (see pages 5-6). SEC’s managers are long-term investors, however. They have confidence in their portfolio, based on 3-to-5-year investment theses, and bought shares in the trust throughout Q2 2018, now owning around 4% of it. SEC’s discount is towards the bottom end of its trading range; and the managers believe that this could represent an opportunity. The board has authorised share repurchases to stabilise the discount.
SEC aims to achieve absolute returns over a medium-term period, principally through capital growth. SEC is managed with a focused portfolio of investments selected on the same basis that a private equity investor would use to appraise its investments.
SEC : Strategic Equity Capital – Confident despite short term setback
