TM Oberon UK
Special Situations Fund
The TM Oberon UK Special Situations Fund focuses on shares deemed undervalued due to unique factors affecting the individual company, its parent group, or affiliated entities. This may include companies undergoing recovery efforts, experiencing management changes, showing potential for strong growth, holding undervalued assets, or engaging in refinancing. The fund’s Investment Manager has flexibility in investment selection, unrestricted by geographic or industry focus.
Investment Approach
Fund manager Richard Penny identifies two primary approaches to finding companies undervalued by the market:
1. Value Situations: These may include distressed companies where market confidence has dipped, but Richard has identified significant upside potential, believing the market’s reaction to be an overcorrection.
2. Growth Oppurtunities: The fund also targets top-tier companies—primarily in large- and mid-cap stocks—that show strong value-creation and growth potential not fully reflected in their current market pricing.
For both approaches, entering at an attractive price point is a critical component of the strategy.
Meet the Manager
Richard Penny
Richard joined Oberon as a fund manager in December 2024, bringing experience from CRUX Asset Management, where he managed the TM CRUX UK Special Situations Fund since October 2018. He previously worked at LGIM for 15 years, managing the L&G UK Alpha Trust and L&G UK Special Situations Trust, and held roles at M&G Investment Management and Scottish Amicable Investment Management. In June 2021, Richard received an AAA rating from Citywire. He holds a master’s degree in Engineering and Economics from Oxford University.
Fund Objectives and Investment Policy
The Fund’s primary objective is to achieve long-term capital growth, targeting an investment horizon of at least 5 years. To pursue this, the Fund will allocate a minimum of 80% of its assets to shares listed on UK securities markets, focusing on companies incorporated or domiciled in the UK. These companies may or may not have their headquarters or significant business operations in the UK.
The Fund invests across a range of market capitalisations, but with certain limitations:
No more than 40% of the Fund’s assets will be invested in (i) small companies or (ii) companies listed on the Alternative Investment Market (AIM).
For clarity, a small company refers to those listed on the London Stock Exchange with a market capitalisation below that of the largest 350 listed companies.
The portfolio will be managed with a concentrated approach, potentially enhancing returns but also increasing risk. This strategy may result in higher volatility, with fund performance more significantly impacted by price fluctuations in individual holdings.
The Fund may also hold cash, cash-equivalents (including money market instruments and deposits), warrants, and exchange-traded derivatives. While derivatives may be used to meet the Fund’s investment objectives or for hedging, it is currently not anticipated that derivatives will be actively utilised.
In response to adverse market or economic conditions, the Investment Manager has the flexibility to adjust the Fund’s exposure to different asset classes and investment types to protect shareholder interests. These adjustments are expected to be short-term. While the Fund primarily aims for capital growth, there may also be instances where it generates income returns.