Matthew Drennan, Zurich Financial Services head of investments, said the fund had a unique growth strategy where the team looked to observe inflection points in earnings growth.
“What they’re trying to do there is they’re looking to get into companies at the early stage of acceleration and earnings growth,” Drennan said.
“They’re less concerned about how big the earnings expansion is but whether it is in a positive and sustainable direction.
“If you look at the top 10 holdings, Amazon is number one and we know they had a huge cloud computing business that’s been a beneficiary of the move to technology, particularly with the COVID-19 situation.
“Alibaba Group, which is online retailing, is another beneficiary of the environment we find ourselves in, as well as a longer-term trend where people are looking to do more online rather than in the bricks and mortar.”
When it comes to analysing an equity, Drennan said it was a process of understanding the competitive advantage and identifying whether it had favourable or accelerating earnings growth.
“If you believe earnings expectations for a company are above what the market is currently pricing in, then that’s a trigger in terms of investments,” Drennan said.
Loftus Peak Global Disruption’s nomination was notable as the fund specifically focused only on disruptive companies that “changed the way business operates”.
Anshu Sharma, portfolio manager, said the thematics the fund invested in had not changed in the last five years.
“Obviously due to COVID-19, there was more movement towards our thematics, where people started working from home and there was more remote work going on,” Sharma said.
“There was more virtualisation happening and the pace and adoption of our thematics has increased.
“We were expecting this kind of market to be there for our companies in 2023 or 2022, but it’s been brought forward.”
