Angelos Damaskos, the chief executive of Sector Investment Managers, has an eye for an undervalued stock in the natural resources sector. As the fund manager of both the Junior Oil Fund and Junior Mining Fund, he has spent the last five years building a portfolio of smaller capitalisation holdings that has outperformed its FTSE 350 benchmark and proved that accomplished stock picking can uncover hidden gems in sectors renowned for their risk and volatility. He spoke to Stockopedia News about the current climate for resource investors, his criteria for identifying winners and the lessons he has learned from backing smaller companies.
Sector Investment Managers has a very specific focus in the oil & gas and mining markets. What was the background to the creation of your two funds and what is your view of the markets at the moment?
These are very volatile markets, very nervous and enough to keep fundamentally-driven investors on the sidelines. We try to be defensive, we try to reduce the volatility wherever possible but otherwise we are watching the market and waiting to see if there are any opportunities. We have been very defensive since the beginning of the year, which has served us very well because we have been able to deploy our cash at times when the markets seemed to be over-sold. We have been buying some of our core holdings at very attractive prices and have now reduced the cash levels in both funds to about 6-7%, so we are much more invested than we were at the beginning of the year. From here on we will have to wait and see; it is not unlikely that we will see something much more dramatic in the markets, which will drive down prices across all the equities.
I am a Greek national and I arrived in the UK in 1981 to study engineering at the University of Glasgow, then I returned to Greece to do my military service and then came back to do a post graduate course, an MBA, at the University of Sheffield. By 1989 I was working in the City, in investment banking, and focusing on natural resources.
In 2003, I subscribed to the thesis of a new super-cycle in energy and commodities because of the emerging demand from Asia and China as well as the fall of communism and the liberalisation of industry over there.…
