People from Yorkshire are often stereotyped as being proud of their identity and careful with money, and a “first of its kind” investment fund could be said to tick both boxes – as it will only put investors’ cash into companies based in the county.
There are plenty of investment funds that concentrate on just one country, but the Yorkshire T20 Portfolio goes one step further by having a strict regional focus. If a company isn’t “made in Yorkshire”, it doesn’t go in the fund.
The York-based asset management company behind it said the tide was turning against globalisation in the wake of the coronavirus pandemic, and this was a way for people from Yorkshire – as well as other investors – “to grow their savings while supporting local home-grown industry”.
But a fund where people’s money is being invested in a relatively small number of companies in just one region will inevitably involve more risk and volatility than one that spreads the cash more widely. And while this is open to individuals and firms, the minimum investment of £20,000 will put it out of many small investors’ reach.
Mole Valley Asset Management (Mvam) said it believed this was the first fund of its type and would only invest in 20 listed companies based in Yorkshire.
The first wave of firms include Wetherby-based biotech firm Avacta, which made the headlines a few days ago because it is developing a 10-minute home saliva test for coronavirus that will be similar to a pregnancy test.
Another of the 20 companies is Zoo Digital, which has bases in Sheffield, London, Los Angeles and Dubai. It specialises in subtitling and dubbing and is pioneering digital technology in the entertainment industry.
Duncan Sanford, who heads up Mvam’s York office, said that while there was always going to be an appetite for investment in global companies, “we’ve seen the tide starting to turn for some time, with people looking increasingly to be part of their local economies”.
“We can only see that counter-globalisation drive increasing post-Covid-19 as people reassess their priorities in all aspects of their lives. And if they are increasingly looking to shop local, why not invest local as well?” he said.
More than 80 companies that have head offices in Yorkshire are listed on the stock market, from luxury food producers and digital gaming companies to property firms and healthcare equipment minnows, according to Mvam.
“There is so much potential in this area – in industries from digital to creative and pharmaceutical – it’s hard to choose, but we believe what we have come up with is an excellent group of listed firms which are either already hugely successful or, in many cases, about to break through,” Sanford said.
It emerged on 21 May that Avacta had signed a distribution agreement with a venture set up by the billionaire co-founder of online fashion brand Boohoo to sell its coronavirus instant testing kits to consumers.
Alastair Smith, Avacta’s chief executive, said of being included in the portfolio: “I’m a Yorkshireman myself, and many of our employees based at our Wetherby lab and head office are local, so it’s great to have a showcase like this for the innovation and entrepreneurship going on in Yorkshire.”
Mvam highlights the high-risk nature of the actively managed fund on its website: “We would not advocate putting your entire wealth in such a portfolio. While the rewards can be high, so can the risks.”
It said this was partly because the companies in the fund could be small in size, adding: “The portfolio is concentrated, holding 20 companies, and therefore has additional company specific risk.” The £20,000 minimum investment was “considerably lower than the thresholds for other directly managed portfolios with exclusive access to the portfolio manager”.