The manager notes opportunities in some of the largest energy and mining companies, which are more of an economic growth play, with quality assets instead of smaller firms that are in need of financing.
“These [larger companies] are doing the right things in this type of environment in terms of cutting costs, still paying dividends, some are still buying back shares, they have good quality assets and they are well managed relative to some of the smaller-cap companies. Even if commodities prices drift lower, these are the ones, which in 10 years time, will still be around to enjoy the benefits of higher commodity prices when the cycle turns.”
Meanwhile, with shale gas discoveries and exploration continuing in the US and plans to explore the resources in other countries such as the UK, could this be the start of a new commodity boom?
Mr Birrell notes: “Shale gas is a massive issue, what it has done to the energy industry in the US is revolutionary and it is clearly an opportunity in a number of other countries as well, not least the UK. It won’t just be [opportunities] in little companies, the large companies will very much want to be involved in this too and will spend huge amounts on it.”
