View the article online at http://citywire.co.uk/money/article/a656071
Nimmo buys trio of ‘damaged’, but rehabilitating shares
Standard Life smaller companies fund manager buys companies 'that have been compromised and damaged by the banking crisis'.
Paragon, the buy to let lender recovering from a ‘near death experience’, is among a trio of shares recovering from the financial crisis that fund manager Harry Nimmo has added to his £1 billion smaller companies fund.
‘We’ve gone back into some sectors that have been compromised and damaged by the banking crisis – specialist lenders and real estate,’ says Nimmo, the Citywire A-rated fund manager who runs the Standard Life Investments UK Smaller Companies fund .
Paragon (PARA.L), the buy-to-let lender cashing in on the decline in house ownership, has seen a 54% surge in its share price over the past 12 months. ‘In 2008 Paragon had a near death experience. A couple of major refinancings later, the company has gone through a rehabilitation period and is back into growth,’ Nimmo said.
‘The good thing about Paragon now, is banks which used to infringe on its market have disappeared from the scene. They’re not interested in the buy-to-let market – so Paragon have it to themselves,’ added the Scotsman, who has run the smaller companies fund since its launch 16 years ago.
Nimmo (pictured) has also bought into Workspace (WKP.L), which rents out offices, meeting rooms and other working space within the M25. ‘This was another casualty. It’s been through a couple of refinancings. Occupancy rates have always remained resilient and it dominates that market,’ says Nimmo.
The company gets an extra ‘kicker’, he said, when they are able to sell sites for ‘change of use’, perhaps as housing or retail space. ‘That trend is starting to occur,’ says Nimmo.
A third company that suffered in the banking crisis but is back in Nimmo’s favour is property company Quintain Estates (QED.L). ‘Recovery and risk are in,’ says Nimmo, who describes himself as ‘pretty positive’ about the economic backdrop for investors.
Nimmo has also bought into PayPoint (PAYP.L), the bill paying system which he says is ‘really taking over from the Post Office’. And Amerisur, a Colombian based oil and gas company ‘which is developing some major fields in south east Colombia’.
Investment trust alternative
Nimmo’s UK smaller companies fund, which features in Citywire Selection, has been ‘soft-closed’ to new investors, a tactic taken by investment houses when they want to stem inflows into swollen funds. It is however available from the company itself.
Alternatively investors can put their money into the investment trust of the same name , which largely invests in the same companies (there is an 80% overlap, Standard Life says).
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In this guide to investment trusts, produced in association with Aberdeen Asset Management, we spoke to many of the leading experts in the field to find out more.
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- The Paragon Group of Companies PLC (PARA.L)
- Workspace Group PLC (WKP.L)
- Quintain Estates And Development PLC (QED.L)
- PayPoint PLC (PAYP.L)
- Amerisur Resources PLC (AMER.L)
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