Amati Global Investors is an independent boutique manager that invests in small and mid-size companies. The company was established in 2010 in Edinburgh and is led by Paul Jourdan.
Their Global Innovation Fund strategy is based on long-term (5+ years) investments in companies that create value from innovative products or services. The primary sectors for investments are telecommunication, technology, healthcare, and industrials.
The fund conducts bottom-up research, creating a balanced approach to investments in innovators that include pioneers, enablers, and adopters. Their portfolio is unique, with very little overlap with generalist global funds. Assets under management (AUM) are at $24.5 million, which is divided among 40 holdings.
In the May report, the fund disclosed a monthly performance of 6.49% in comparison to the benchmark (MSCI ACWI) return of 4.74%.
Top 10 holdings:
- Novonesis (CPH:NSIS.B) – 4.1%
- Autodesk (NASDAQ:ADSK) – 3.4%
- PTC (NASDAQ:PTC) – 3.4%
- Danaher (NYSE:DHR) – 3.3%
- Infineon Technologies (ETR:IFX) – 3.2%
- Eckert & Ziegler (ETR:EUZ) – 3.2%
- MercadoLibre (NASDAQ:MELI) – 3.1%
- Intuitive Surgical Inc. (NASDAQ:ISRG) – 3.0%
- DexCom (NASDAQ:DXCM) – 2.9%
- Telix Pharmaceuticals (AX:TLX) – 2.9%
The portfolio is sector-wise heavily invested in the tech sector (38.2%) and healthcare (32.9%). It is followed by industrials (16.5%) and materials (6.1%). Over 56% of the investments are in companies with a market cap between $2 billion and $25 billion. 25% of the portfolio is invested in companies with a market cap larger than $50 billion. Geographically, 61% of the portfolio is invested in the Americas, while Europe (without the UK) is at 30%.
Market Commentary
During the month, increased trade negotiating efforts resulted in improved overall investment sentiment. The bond market reported increased demand for long-dated auctions in several geographies, including the U.S., Japan, and the UK.
Amati is seeing a change in the market where investors are again rewarded for taking risks, while banks are not regularly addressing debt issues.
Among the portfolio outperformers are Impinj (NASDAQ:PI), Vusion Group (EPU:VU), and Allegro MicroSystems (NASDAQ:ALGM).
Impinj, the supplier of RFID and IOT tech for suppliers and retailers, reported very strong gains, beating the previously anticipated drop in share value.
Vusion Group, the supplier of electronic shelf label equipment to retailers, had a strong month, which was coupled with signing its first contract in the UK.
Allegro Systems, a sensor designer for automotive and industrial companies, went through a withdrawal of a takeover bid by a competitor, ON Semiconductor, but still managed to generate positive gains.
The portfolio underperformers mostly came from the healthcare sector. There are indications that the supply chains will be checked, which can result in the implementation of tariffs or other types of measures. The goals of these measures are to attempt the reshoring of the healthcare supply chain and pharmaceutical companies in the U.S.
Since the Republicans took over, government-funded research funding has been cut, while changes in the FDA leadership were off-putting for new investors.
Eli Lilly (NYSE:LLY) was the positive contributor from the healthcare segment of the portfolio. Increase in sales of several key products (weight loss and diabetes type 2 treatments) is helping push the growth by 45% on a YoY level, taking the market share of a competitor, Novo Nordisk (CPH:NOVO-B).
IQVIA (NYSE:IQV) reported muted performance as a result of a drop in clinical work advancements. The capital investments in clinical research are dropping, due to macro factors, but the forward-looking indicators are all looking good.
Bruker (NASDAQ:BRKR) reduced its guidance with weaknesses being brought by exposure to China and reduced government spending.