Back in March this year, David Seaman of Alpha Cygni Asset Management joined me for a conversation with Adam Rackley, the founder and fund manager at Cape Wrath Capital.

Adam epitomises the philosophy of doing things differently when it comes to investing in UK equities. He has pursued his unique approach since founding Cape Wrath in 2016 using what he describes as a behavioural value strategy.

He looks to identify market capitulation events and narrative shifts to cycle capital into shares when they are driven by emotion more than rationality. He then looks to exit positions when narrative shifts lead to equity revaluations to his appraised fair value.

Adam runs his fund according to what he calls the Rules of Wrath, not the established conventional rules of thumb that seek quality companies and long-term holding periods that try to avoid volatility.

No, for Adam it is a marketing strategy designed to discourage investors who can’t stomach the journey into the deep value that exists in the UK market. He wants a band of loyal investors who understand and back his strategy, a strategy he is fully committed to and invested in.

While he has all the credentials of a conventional equity fund manager, Adam is anything but. Previously an army officer, Adam has degrees in PPE and law and the CFA qualification.

He has also rowed the Atlantic, written a book, swam the channel, cycled from Land’s End to John O’Groats, and lived and worked in India for several years. He is now based in North Wales.

According to Morningstar, only one of 72 smaller company funds outperformed the UK small-cap index last year. That fund was Cape Wrath. A one-year wonder? Well, not exactly.

As of the end of May this year, Cape Wrath has significantly outperformed its benchmarks over one month, six months, one year, and five years by sticking to and evolving its rigorous investment strategy and process.

This is a fascinating conversation in which Adam delves into some examples of how his strategy has played out and how he hopes to develop his process further.

He then looks forward to closing the fund to new investors, switching off his LinkedIn account, and retiring to his library to do what he enjoys best: picking undervalued shares.

Please enjoy our conversation with the maverick investor, Adam Rackley.

Made possible by Progressive Equity.

For this episode, I am joined by Tom Like, an analyst at Singer Capital Markets, for a conversation with Nick Prest, the Founder and Chairman of the defence services and technology company Cohort PLC.

Prior to founding Cohort, Nick worked in the Ministry of Defence before joining United Scientific Holdings, later renamed Alvis. A few years later Nick became CEO.

Alvis was eventually acquired by BAe, and Nick, along with several former Alvis colleagues, set up Cohort in 2006. With a market value of £26m, Cohort aims to provide technical services to the defence industry in the UK and abroad.

Today, 18 years later, Cohort is the parent company of six operating businesses, providing a wide range of services and products for British and international customers in defence, security, and related markets. Its market capitalisation is £335m.

In a fascinating discussion, Nick talks about the changing nature of the defence industry over his long career, why he decided to establish Cohort, how he has gone about making acquisitions and the decentralised operating model for the Group, how the listed defence industry has changed, and how our rapidly changing geopolitics is likely to change the operating environment for Cohort in the coming years.

With defence spending rising up the priority list for all Western countries, the outlook for Cohort and the rest of the defence industry hasn’t looked this good for decades. As he says the expansion of the Chinese navy over the last 20 years is a source of considerable concern to other countries in the region, such as Australia, Indonesia, Thailand and the Philippines, all of which are Cohort customers. Meanwhile, the war in Ukraine has radically changed perceptions about the need to fund defence budgets further in Europe.

I began by asking Nick about his background and how and why he came to establish Cohort in 2006.

Made possible by Progressive Equity Research.

A few weeks ago, Tom Like of Singer Capital Markets joined me for a fascinating conversation with Nick Prest, the Founder and Chairman of defence technology provider Cohort.

Nick provides a wealth of anecdotes and knowledge of the defence industry, the geopolitics that drives it, and how it will likely change in the years ahead.

Coming soon on all good podcast apps.

Made possible by Progressive Equity Research