Investment house, Blue Whale Capital, has seen remarkable success over the last six years, particularly with its flagship investment fund, Blue Whale Growth. This success has been backed by a £25 million initial investment from Peter Hargreaves, the chairman of the company, and subsequent investments totalling £70 million, resulting in the fund currently holding assets of £880 million. Investors who got in on the ground floor have enjoyed impressive returns of over 105 per cent, outperforming the average fund in its global peer group by a significant margin.
Challenges and Triumphs
Despite its impressive long-term gains, Blue Whale Growth has not been without its challenges, especially during the COVID-19 pandemic
and periods of economic turbulence characterized by high interest rates and soaring inflation. The company’s founder, Stephen Yiu, empathizes with investors who experienced a dip in the fund’s performance during such rough patches. However, the fund has managed to prove the resilience of its investment strategy, recovering from losses in the first half of 2022 with a striking near 36 per cent return in the subsequent 18 months.
Investment Strategy and Portfolio
The Blue Whale Growth fund is designed to deliver capital growth and invests in 29 listed companies globally. Its portfolio comprises a diverse range of stocks
, from technology giants like Adobe, Mastercard, and Microsoft to companies such as artificial intelligence specialist Nvidia, US financial services giant Charles Schwab, energy titan Canadian Natural Resources (CNR), German healthcare specialist Sartorius, and Italian drinks firm Campari. This eclectic mix aligns with the fund’s strategy of holding high-quality companies capable of performing well regardless of the economic backdrop.
Learnings from Investment Mistakes
Not everything has been a resounding success for Blue Whale Growth, with the fund making strategic disposals, such as its withdrawal from North American railway companies and divestments from various other companies, including US software companies Autodesk and Intuit, and Dutch semiconductor giant ASML. Yiu admits to learning from these experiences, acknowledging the importance of being responsive to market dynamics and adjusting the fund’s holdings accordingly.
Solid Investment Infrastructure and Future Outlook
Supported by a dedicated investment team, Yiu has built a solid investment infrastructure around the fund, emphasizing the company’s focus on delivering returns for fund investors. Despite the challenges faced, he remains optimistic, highlighting the youthfulness of his team and their commitment to serving investors with distinction over the long term. Hargreaves’ unwavering faith in the fund, demonstrated by his continued holdings since its inception, further underscores its potential for sustained growth and success.
The Blue Whale Growth Fund’s remarkable journey exemplifies the resilience and adaptability required to thrive in the competitive investment landscape. With its commitment to delivering strong returns, a diverse and robust portfolio, and a dedicated team at its helm, the fund continues to stand as a compelling investment opportunity in the ever-evolving global market.