Mid Cap Equity Service


Investment Manager


A directly invested, segregated service that aims to achieve capital growth and income from a portfolio of UK mid cap shares. The service invests predominantly in constituents of the FTSE 250 Index.


Whereas many unitised funds hold hundreds of individual stocks, the Mid Cap Equity Service avoids excessive diversification in favour of more focused portfolios, which typically comprise 15-30 of our very best UK mid cap ideas. The service has the ability to pay out any income received directly on a smoothed monthly basis or have it re-invested.


The Mid Cap Equity Service is aimed at anyone seeking to include exposure to medium-sized UK companies within their investment portfolio. We would guide clients towards a minimum investment of £40,000.

Investment Process

The Mid Cap Equity Service is managed according to an investment process that focuses on companies with the following characteristics:


The value of any company is the present value of its future cash returns to shareholders. We estimate the value of our portfolio companies by carefully analysing historic financial statements and, based on our understanding of the individual businesses, projecting free cash flow – or potential dividends – into the future. We regard a valuation as attractive if we can be confident we are not overpaying for the future cash returns we expect.


We look for companies with high profit margins, evidencing a sustainable ‘edge’ – based on brands, ‘sticky’ customers, or cost advantages, for example – that will give them the best chance of staying ahead of the competition, and protecting their above-average profitability.


Earnings, or accounting profits, are based on the ‘accrual’ method of accounting, by which income is recorded when earned and expenses when incurred, not when cash actually changes hands. In order to gauge a company’s self-funded growth potential or likely dividend payments to shareholders, we pay close attention to how consistently it can convert its paper profits into cash.


We believe that meeting a company’s management is very important, and we regularly meet the managers of companies in which we have current or prospective holdings. We look for a good record on earnings guidance and investor expectations management, as well as personal attributes such as honesty and frankness. Substantial management share ownership, aligning their interests with those of shareholders, is also desirable.


Well-judged capital allocation is one of the key determinants of shareholder value creation, in our view. We look for companies with well-invested assets, a solid growth investment record – whether organic or through M&A – and a proven willingness to return excess cash to shareholders where appropriate.


Ideally, we prefer companies that have been implementing the same business model over a number of economic cycles, and which have generated above-average total returns to shareholders over that period.

Risks to be aware of

Investing in mid cap shares may carry a higher degree of risk than investing in the shares of large cap companies, such as those in the FTSE 100 Index.
The actual risk of your individual portfolio will depend upon a combination of market risk and stock-specific risk, which can be mitigated by the portfolio manager through diversification. Portfolios, however, will be concentrated in a relatively small number of stocks (typically 15-30).
We would generally recommend that overall, an investment into this service should not represent more than 20% of an otherwise well-diversified portfolio.
As is the very nature of investing, the value of your investments will rise and fall over time. Please do not assume that past performance will repeat itself and you must be comfortable in the knowledge that you may receive less than you originally invested.

Find out more

Contact us on +44 (0) 20 7337 0777 or send us an email at [email protected] to find out more about our Mid Cap Equity Service or alternatively fill out the form below to download the brochure.
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