The first half of 2024 has been the busiest since we launched the fund - busy because there are so many opportunities to explore, which makes running the fund extremely rewarding and exciting.

In this letter we have examined just two opportunities where upside is multiples of the current price. Perhaps.

However I have some concern about markets overall. Could market participants realise that the US is overvalued? Perhaps.

Could passive investing see some reversal in future? Perhaps.

Could the US elections prove to be the catalyst for capital flight from the US (and where would that go)? Perhaps…

Finding opportunities that offer value is not difficult. The UK in particular, and other global markets – notably China - have many opportunities.

Active managers are declining both in number and assets under management due to their underperformance and the trend towards passive investing. Think of it as the reallocation of resources from the lazy to the thoughtless1. That has left an open goal for true value investors like us. While value opportunities abound, it is not enough to simply to make the investment and let Mr Market re-rate it. That doesn’t work anymore. Rather, generating returns requires an important second step – actively unlocking value. Over the past 4 years, we have moved our approach to focus on this critical second step.

I am currently on the board of three, and are closely involved with five of our investee companies. We take this responsibility very seriously, as we want to do the best for all shareholders….

Tough decisions needed to be made to right-size the head office to be fit for purpose. In iOCO’s structure, the head office overhead had become a tapeworm, feeding off the 4,500 employees and consultants doing the hard work at iOCO’s 4000 clients. The harder the front- line employees worked, the fatter the worm became. Employees were rightly frustrated. Why? For iOCO to thrive, staff need to get the benefits that arise from their hard work and dedication to the company. This can only be done by rewarding those who contribute to revenue, not those strangling the oxygen out of the business with pointless bureaucracy. Previous promises to right-size had turned out to be nothing more than expense reallocation initiatives…

We see several similarities to the 1970’s in today’s UK market. That was when the true activist investors came to the fore. We are in awe of the investors profiled in the BBC documentary The Mayfair Set2 and their contribution to an efficient and functioning capitalistic society.

The early years of Jim Slater (as we wrote about before) lead us to Jimmy Goldsmith. Goldsmith led us to his business partner Roland Franklin. Roland Franklin led us to a more recent business hero, Sir Martin Franklin.

Martin Franklin is best known as the 15-year chairman of Jarden Corporation. Jarden followed a more progressive activist route…