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5 Minutes With: Crux’s Richard Penny

This week Richard Penny, manager of the Crux UK Special Situations fund, reveals the book that is influencing his job

Annalisa Esposito 11 October, 2019 | 9:32AM

Richard Penny

Richard Penny, 49, has managed the Crux UK Special Situations fund since its launch in 2018. The veteran investor moved from rival firm L&G after 15 years, where he ran the popular L&G UK Alpha Trust. His fund at boutique investment house Crux is up 12.5% in the year to date and top holdings include petroleum firm Vivo Energy and low-cost airline Wizz Air.

What does the fund do?

Essentially, invests in UK stocks. Special situations investing means find companies that are currently unloved or out of favour but we believe are due a turnaround. 

What is your favourite position in the portfolio?

An international space group called IWG. The company is going through a transformation and is changing its business model to franchising, which we think will be very lucrative over the next two or three years.

What is your best ever investment?

Software company GEO Interactive. I bought the stock on a grim day in 1998 for 15p. It went up to £33 – which means its share price increased 220 times. 

And your worst?

Firestone Diamonds. It was an emerging force in diamond mining in Africa but I backed a very promising project too early and kept pouring more money into it. We lost quite a lot in the process.

The most important lesson you’ve learned?

To separate an investment from its price. You can pick a brilliant business but if it’s too expensive, it’s not a brilliant investment.

What’s the best thing about the job?

That there aren't many deadlines, apart from a few reports. The job is much more about working out what’s important in the moment.

And the worst?

When you get it wrong. Losing money is painful. It’s clients money, but it’s also my money as I invest in my own fund.

If I wasn't a fund manager…

I have properties in Montenegro, so I would definitely be over there doing some development work. It’s a beautiful part of the world and the property there is reasonably priced. 

What do you do in your spare time?

I do a bit of gardening now and then, but I have two young kids  they are four and six so my main hobby is playing Lego with them. I like to read too, the last book I read was 100 Baggers by Christopher Mayer. It's about stocks that return £100 for every £1 you invest and how to find them. 

If you were stuck on a desert island, what three items would you want to have with you?

Sun cream, water and a yacht – so I could leave the island!

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

About Author

Annalisa Esposito  is a data journalist for Morningstar.co.uk

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