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Where Neptune's Breese is finding his best UK special sit ideas

Where Neptune's Breese is finding his best UK special sit ideas

Neptune's Alex Breese sees plenty of valuation opportunities and is finding strong special situation opportunities in the media, healthcare, technology and energy sectors.

Breese (pictured), who runs the Neptune UK Special Situations fund and is head of UK equities at the boutique, has positioned his fund to take advantage of the compelling opportunities he sees in these sector.

Within media he is running a significant overweight with 'a strong emphasis on companies that are set to benefit from the analogue to digital trend’. He believes there is undervalued growth potential within this sector. 

Within this dynamic he highlights one of his long-term holding, Aegis, which he first bought into in 2009. The global advertising company has been a big contributor to performance of the fund and was recently sold to Dentsu, a Japanese competitor.

Meanwhile he divides healthcare into three key long-term demographic trends; global population ageing, global population growth and rising incomes in the developing world. 

The fund  is exposed to all three of these trends with Consort Medical, a drug delivery service, and Synergy Health, an outsourced healthcare provider, Breese's strongest convictions.

Moving on to technology, Breese continues to back Sage despite its underperformance in the first half of 2012. In fact he used this weakness to increase his exposure to the stock. 'We utilised this weakness to increase our position as we remain confident in the longer-term outlook for the company.’

Some of the features which encourage Breese to do this include Sage's high level of subscription revenue, strong cash generation and installed base of over six million small-to-medium enterprise (SME) customers.

Finally Breese is finding an increased number of valuation anomalies after recent turbulence in the sector.

He recently bought James Fisher & Sons, which provides niche technical services to the marine, offshore oil and nuclear industries, to tap into this opportunity.  

'James Fisher has significant unrecognised growth potential and the ability to leverage their UK marine services internationally,’ Breese.

According to Lipper, the Neptune UK Special Situations fund has returned 28.4% in the three years to the 29 August versus a 30.1% increase in the benchmark.

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Alex Breese
Alex Breese
89/161 in Equity - UK (All Companies) (Performance over 3 years) Average Total Return: 15.77%
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