Investing in markets with a private equity mindset, with Ken Wotton of Gresham House

We speak to Ken Wotton, managing director of Gresham House’s Public Equity team, which has c £1bn of assets under management through three open-ended funds, Strategic Equity Capital (SEC.L, market capitalisation £157m) and the AIM portfolio of the Baronsmead venture capital trusts. The fund structures allow the team to back businesses all the way through their growth life cycles. Ken’s background in private equity lends itself to the investment philosophy of taking a private equity approach to public equity markets, focusing on the business first. The investment process leverages Gresham House’s private equity presence, with the public market team using the knowledge and network the Gresham House private equity team bring. Ken believes this gives the team valuable insights in terms of what sectors and valuations private equity are buying at, which helps his team validate their own views on valuation. Ken is a strong believer in a team-based approach, and the five-person team brings a diverse range of skills from experience in private equity, M&A, corporate broking and financial due diligence. We explore some of the structural themes the team is looking to play, such as digital transformation, his view on the multi-decade relative low the UK market is at compared particularly to the US market and the opportunities this creates for the team. Ken illustrates the team’s approach to investing by discussing Inspired (INSE.L, market capitalisation £112m), Alpha Financial Markets Consulting (AFM.L, market capitalisation £556m), Moonpig Group (MOON.L, market capitalisation £464m) and Netcall (NET.L, market capitalisation £158m).