As mentioned last quarter, we are still to receive our cash from the takeover of Keyword Studios by EQT Investors, but saw the completed merger between our holding in Redrow and Barratt Developments.

In anticipation of the proceeds from the Keywords cash we initiated a position in Raspberry Pi PLC. Raspberry Pi was founded in 2008, by the current CEO Eben Upton, with the goal of bringing coding and technology literacy to the masses. Over the past fifteen years it has sold over 60m units of its low-cost, high-performance computers to industries, schools and enthusiasts across the world. The beauty of Raspberry Pi computers is that they can be used across everything from automation (e.g. developing your own ‘Smart’ home) to learning, where many schools have used their devices in their curriculums. Although we (rather unfairly) missed out on it’s June IPO, we picked up some stock in the volatility of early August and have been slowly increasing our position since then, joining ARM and Sony, who are strategic investors in the business. The IPO raised over $200m which will be used to accelerate product development and support the Raspberry Pi Foundation’s charitable initiatives. It is pleasing to see a UK IPO this year (there have only been two so far), especially one that so far has been so successful. 

With the remnants of the cash, we topped up industrials, Judges Scientific and Ashtead Technology, who we both met over the quarter and were hit in the low volume markets of August. The recent setbacks in their share prices have been good opportunities to deploy cash and we remain confident, that in the long-term these businesses will continue compounding and outperforming their peer groups. Results in the consumer staples and discretionary sectors have started to pick up with particularly strong statements from AG Barr, on the back of their increasingly diversified portfolio, and Greggs, on continued store growth, seeing both stocks have strong share price performance over the summer. 

Despite our worries that we continue to see UK stocks, especially at the smaller end, be cherry-picked by private capital for being undervalued we remain confident that after a few years in the doldrums the space has finally got some wind in it’s sails. 

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.