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View the article online at http://citywire.co.uk/wealth-manager/article/a762260

Franklin’s Russon benefits from retail and favours pharma

by Eleanor Lawrie on Jul 17, 2014 at 14:41

However, he still holds a handful of what he deems structural growth companies, including Compass Group, his ninth largest position, which provides contract catering at sporting and leisure events.

‘There is an element of cyclicality to their business as they are exposed to the fortunes of the corporate entities that they serve. It’s a very underpenetrated market and there is a structural growth driver to the business. These are companies you will pay a higher valuation for but you still have a very strong balance sheet and strong total return,’ he said.

Elsewhere, Russon said none of the recent rash of flotations in the UK market had tempted him because valuations were overhyped.

‘Internet companies are on very rich valuations, which I find very hard to justify. You are paying for an awful lot of hype,’ he said.

‘Quite a lot of the high profile names are at a lower price, still a long way from a price that I would find interesting. They are not valuations I would feel happy putting into the portfolio.’

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