The wealth manager had a chequered 2013, with £4.8 million of redundancy costs and a board reshuffle that saw David Nicol come in as chief executive.
Ryan (pictured), manager of the top performing £401.7 million Kames Ethical Equity fund, said she had invested in the investment group ahead of the changes, which she believed brought in ‘a redefining of strategy within the business, a much more focused driving of margins’.
‘In 2013, we saw the opportunity to buy more Brewin Dolphin for some of our funds. We got involved in their placing and saw the opportunity for an earnings upgrade to surprise the market,’ she said. ‘We still like it’.
She is also positive on top 10 holding Hargreaves Lansdown, which recently revealed its post-RDR pricing structures.
‘I think the market was a bit worried about the RDR changes and what that meant for many businesses in the financial space, including Hargreaves Lansdown,’ she said. ‘But in terms of what we have heard on pricing from them, we believe it has a strong investment case and we are comfortable with that. The valuation is quite full but that has been the case for some time.’
While the stock has got more expensive, Ryan thinks it will continue to be a market leader.
‘We think it’s there at a growth multiple but they can continue to grow market share. We hear about other players being a bit more cute on pricing but I believe they offer a very strong brand.’
She is broadening out her exposure to stocks set to benefit from the UK recovery.
‘We have been much more positive on developed markets than emerging markets and that has worked very well, specifically in domestic stocks. Media, retail and housebuilders have all in the main performed very well,’ she said.
‘The corporate sector is in pretty good shape in general. As confidence improves, we believe companies will be more proactive about spending their cash to acquire businesses, or to get more employees on board.’
In the 12 months to the end of January, the Kames Ethical Equity fund returned more than double the FTSE All Share, with a rise of 26.4% compared with 10.1% for the index. Over three years, the fund has returned 48.4% compared versus a 27.7% rise for the FTSE All Share.