Fundsmith
| Industry | Investment |
|---|---|
| Genre | Fund Management |
| Founded | November 1, 2010 in London, England |
| Founder | Terry Smith |
| Headquarters | Cavendish Square,, London, England |
|
Number of locations
|
2 |
|
Area served
|
Global |
|
Key people
|
|
| Products | Open-ended equity funds and investment trusts |
| Services | Financial services |
| AUM |
 £6bn (April 2016)
|
|
Number of employees
|
16 (2016) |
| Website | https://www.fundsmith.co.uk |
Fundsmith is a London-based investment management company, founded in 2010 by Terry Smith. As of June 2016, Fundsmith manages over £6bn in assets. Smith has been referred to as "the English Warren Buffett”, after achieving superior investment returns with investment strategies similar to the US investor.
Fundsmith operates a buy and hold investment strategy with a portfolio based on a small number of stocks, chosen on the basis of company fundamentals and defensible competitive advantages. Stocks are chosen through in-house analysis of company fundamentals, eschewing other techniques such as momentum investing, market timing or shorting.
Fundsmith looks for companies generating high returns on capital operating in sectors which are driven by a large number of everyday, repeat events and transactions, such as consumer staples and medical equipment manufacturers. It avoids emerging technology firms, owing to their inherent unpredictability; it also avoids firms in heavily cyclical industries, such as airlines and real estate. Smith does not invest in banks, owing to their reliance on leverage and financial engineering. He was the No.1 rated bank analyst in London from 1984-89.
Fundsmith also looks for companies with an established competitive advantage, for example, Automatic Data Processing, the payroll processor whose large installed base of software is said by Smith to give such firms “annuity-like characteristics”. As Smith told The Telegraph newspaper in 2015: "The reality is that we don’t seek to predict who will win, but rather to bet on a company that has already won."
Fundsmith invests on behalf of individuals, wealth managers, institutions, private banks, prominent families, charities and endowments. All four of the firm’s partners invest their own money in the fund, with Smith having over £60m in it.[1]
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