27 DEC, 2023
By Johanna Zidani from RankiaPro Europe
Ben joined Arcus in 2020. Previously, he was an Investment Director at GAM Investment Management and Fund Manager at RSA. He received a BA (Hons) degree in Economics from Durham University and a BSc degree in Investment Analysis from Stirling University.
My father was in the Royal Air Force so when I was a young the thought of flying aircraft for a living was appealing. I studied economics at both school and university which led me to think a career in finance would be interesting. At the time, I didn’t appreciate the huge range of different roles in financial services, but after meeting an equity fund manager who allowed me to shadow him for a day, I decided that was the job I wanted to pursue.
Arcus have never been macro investors. We follow a bottom up approach which uses a combination of quantitative ranking and fundamental analysis to identify attractive investment opportunities. Our analysis shows that, despite the recent rally in value stocks in Japan, the divergence in valuations remains elevated in a historical context, which we feel should continue to support a value approach. In addition, recent announcements from the Tokyo Stock Exchange focusing on improving capital efficiency for low PBR stocks, and from the Japanese government regarding the rules on hostile takeovers, would tend to favour value stocks in our view.
We often get told by investors that our portfolio looks very different to others. This is exactly what we want to hear because as an active manager you want to be different. We have a seven person investment team, six of whom are actively engaged trying to find good bottom up investment ideas. By having such a team in house we are not reliant on external research which, I think, contributes to us being different.
Our investment approach involves a combination of quantitative analysis combined with in depth fundamental research. We are constantly evaluating our portfolio as well as looking for new investment opportunities. For many years the portfolio had an overweight position in financials including MUFG, Japan’s largest bank, which was the fund’s largest position at the end of 2020. However, after a very good run of performance the stock left the portfolio and the fund now has a more modest weighting in financials overall.
We look at a variety of different ratios to assess the attractiveness of an investment. Our quantitative model has a value component, which looks at 14 different ratios, including Price to Earnings, Price to Book, Price to Cashflow, EV/EBITDA and dividend yield, among others. Given the changes occurring in the Japanese market with regard to capital efficiency, we are also paying more attention to balance sheets.
Competitive – whether it’s trying to beat the market or trying to beat my wife at scrabble.
Inquisitive – Essential for any fund manager.
Engaging – One of my strengths, I believe, is to build a good rapport with company management.
I live in a small village about 35 miles from London. We are surrounded by beech woodlands which are beautiful for walking our dog at the weekends. I also enjoy playing hockey for a local side. The new season has just begun and I managed to score the first goal of the year.