However, that does not mean we have been inactive and that there has not been good news from our underlying companies.

We have been stating all year that we see valuations as being attractive across our small cap universe and over the quarter, two of our five holdings got acquired at substantial premiums; Brewin Dolphin which has been bought by Royal Bank of Canada for £1.6 billion, a 62% premium to the market price, representing 2.8% of the wealth manager’s AUM – a very healthy offer that we gladly accepted. On the back of this move, we sold the entire position at the start of the quarter. Then at the beginning of May, our top holding, Ideagen, the SaaS business specialising in highly regulated sectors, agreed a £1.1 billion takeover from London-based Private Equity firm, Hg Pooled Management. Hg offered a significant premium to the pre-offer share price, reflecting our conviction that this is a strong business that deserves a high multiple. After the offer, we began to reduce our position, crystalising a return of just under 100% since investment during 2020.

With these substantial cash windfalls, we have been patiently re-investing into new and existing holdings. In industrials we have added to air filtration specialist, Porvair and cement super-creed manufacturer Somero Enterprises, in tech we have added to video games businesses Keyword Studios and Frontier Developments and in more consumer facing stocks (which have been hit hardest) we have added to Big Yellow Group, Greggs, Trainline and Young’s.

The diversity of these sectors reflects how widespread the market selloff has been and, conversely, how many opportunities the market is now giving to enterprising investors. We will continue to build our investments in these quality businesses and are confident that this will prove to have been a fruitful time to be putting money to work in a volatile market.

The above article has been prepared for investment professionals. Any other readers should note this content does not constitute advice or a solicitation to buy, sell, or hold any investment. We strongly recommend speaking to an investment adviser before taking any action based on the information contained in this article.

Please also note the value of investments and the income you get from them may fall as well as rise, and there is no certainty that you will get back the amount of your original investment. You should also be aware that past performance may not be a reliable guide to future performance.