86 of the companies are currently held by at least 1 investor that IMHO is principally interested in Value or GARP shares. I am a big fan of looking at quality investors and researching their picks. If I do not understand them or agree with them I don’t have to buy.
At the end of the process I have 81 that I am not going to touch, 3 that I am looking at further and 3 that I have decided to take, what I call, a watching holding in. By this I mean it is enough money to make sure I read all the documentation but not so much that I will not have to add or sell in the future given I do not like to hold sub 1% amounts in my portfolio. Sub 1% holdings get looked at a lot.
My first small investment was into the Miton Group. Miton Group is a UK fund manager with an active approach. I am fully onboard with the general reflection that Passive funds on the whole deliver better than Active funds do as a group, but for a lower cost. However I do feel that as more of the market becomes Passive there is a bigger opportunity for the genuinely Active to outperform.
Having done some due diligence (mainly looking at the numbers) I felt comfortable that it was not overvalued based on its historic earnings. Ie I am not paying a lot for its future growth. In the case of Miton it has a market cap of £80m and an EPV (8%) of £68m. With £20m of cash on the balance sheet against an employee benefits trust of £6.5m to me it looks to have a small margin of safety at current levels. The two tipping points for me are (a) the fact that I got some generally positive reviews on the funds run by Miton and (b) the underlying growth rate does at the moment seem to be in excess of 10%. So limited downside, potentially positive upside worth an inital watching investment.