Investment Week speaks to manager of the TM CRUX European fund James Milne about how he has been navigating market turmoil this year, how the current crisis compares to the 2008 collapse and what it is like managing money from the comfort of his home.
James Milne joined CRUX Asset Management in June 2015, having previously served as a European equities fund manager at Henderson Global Investors, after the merger of the Henderson European Special Situations and TM CRUX European Special Situations.
Since his arrival at CRUX, Milne has co-managed the European Special Situations fund and the TM CRUX European Situations fund alongside industry veteran Richard Pease.
He also co-managed the TM CRUX European fund alongside Pease. In March this year, he was named as lead manager of the fund, although he still works closely alongside Pease on the portfolio.
Have you been using the current backdrop to top up or add new holdings? If so, which ones?
Within the CRUX European fund we topped up existing positions and added a few new positions of some stocks, which have become quite attractively valued.
We bought DSV, for example, a global logistics business, which has sold off quite significantly. It has been run very, very well by excellent management for many years. It is a very good business.
I also added a Swiss stock called Software One, which sells often US-based software to businesses. It has no debt and it has got recurring business.
[Software One's board] think it should be doing more than 10% this year, but it should at least be going high single digits this year.
There are stocks that came back quite a bit in in the downturn, which you can see having quite nice secular growth drivers in the medium term.
Lots of different scenarios could pan out in terms of how we recover. How do you position for this as a manager, through such a lack of uncertainty?
Commentators have been straddled between the famous 'V-shape' and the 'W-shape'.
The 'V-shape' is where everything comes back quite quickly, and then stays back.
That is probably fading a little bit and then there is more of a thought towards a 'W-shape', similar to what was seen in 2008/2009.
We are slightly wary of some stocks which are a little bit more cyclical even though they are actually quite defensive in nature.
There is some nervousness about how some of the inventory gets cleared in quite a few industries.
There are a lot of stocks which are normally resilient in a normal or 'classical' recession but because they might be a 'people' business they have found this downturn actually quite tricky.