The Lindsell Train UK Equity Fund performance update for September reveals the one UK share that the £6.2bn fund took a new position in.
Commenting on the addition was star fund manager Nick Train who noted that the fund should have owned it years ago and the fault it didn’t was all his.
The share added is Experian (LON: EXPN) and is reflective of a view that the fund didn’t have too many so called ‘expensive’ growth companies. It also reflective of one of two major themes for investment the fund is looking for including UK companies with globally-competitive assets in technology and data.
“Last and perhaps most important, we have noted that, like RELX, EXPN is undergoing an active shift from simply selling data to selling data enhanced by decision tools. This means that the majority of the company’s investment is going into overlaying the datasets with proprietary algorithms and data management tools, which increase the utility of the underlying data and hence the “stickiness” of EXPN’s customer relationships. Right now 55% of sales come from what the company calls “Data”, i.e. large databases of credit history from which reports are generated. But the “Decisioning” segment, i.e. advanced analytics and tools sitting on top of Experian’s datasets, is now 25% of revenues and, crucially, growing faster than Data.
We believe EXPN’s datasets will continue to be essential products, but the shift to decision tools is what will drive substantial growth over the next decade.”Nick Train, Lindsell Train UK Equity Fund Commentary – September 2020