Aegon's Audrey Ryan has positioned her £221m Ethical Equity fund to benefit from an anticipated increase in capital expenditure among UK businesses.
Ryan, who also manages the £46.8m UK Opportunities fund, remains negative on UK domestic earnings but says there are growing signs of increasing capex in many industries following swingeing budget cuts in 2008 and 2009.
She says balance sheets are stronger and many companies have begun raising capital and generating cash again, suggesting it is only a matter of time before they begin reinvesting in equipment, recruitment and advertising.
Ryan has bought B2B publisher Informa and recruitment agency Robert Walters as she believes these areas will benefit most from renewed spending.
"Given the evidence of growth in certain industries, these companies must accept they will have to start spending again," Ryan says.
"Whether it is on equipment, recruitment or B2B media and events, expenditure will return, but it is not really forecast in some of the companies we are investing in.
"While it is still very fragile out there, we do expect companies to start attending corporate events and start spending a bit more on sponsorship, and these are things Informa will benefit from. We also expect recruitment to pick up as things improve, which is why I own Robert Walters."
Ryan also favours growth stocks and has built up a 1.3% position in generator provider Aggreko. She says the company offers good structural growth potential alongside international earnings and has seen its share price grow from 890p in January to 1417p today.
"For us it is a company that is all about structural growth," Ryan says. "In many countries power is in short supply and high demand.
"We were looking for growth ideas and Aggreko very much fit the bill. It is our belief they can continue to re-rate, because in an environment such as this, investors are willing to pay up for future growth."
