Tom Dobell Investment Trust: A Deep Dive

The name Tom Dobell was once synonymous with UK smaller company investing, primarily through his management of the MIGO Opportunities Trust (formerly known as the Strategic Equity Capital Trust). His career at MIGO Investment Management (previously Miton Group) spanned many years, during which he built a reputation for a distinctive, often contrarian, investment style.

The core of Dobell’s approach involved identifying fundamentally sound, yet often overlooked or undervalued, UK smaller companies. He looked for businesses with strong management teams, robust balance sheets, and the potential for significant growth. He wasn’t afraid to take concentrated positions, believing that in-depth research and conviction were key to generating above-average returns. This high-conviction approach meant the trust’s performance could be volatile, experiencing periods of significant outperformance followed by stretches of underperformance.

MIGO Opportunities Trust, under Dobell’s tenure, primarily focused on unquoted and smaller quoted companies, which are generally less researched and less liquid than larger, more established firms. This allows for potentially higher returns, but it also carries increased risk. The illiquidity of unquoted investments can make it challenging to exit positions quickly, while smaller companies are often more susceptible to economic downturns or company-specific issues.

One of the key strengths, and also potential weaknesses, of Dobell’s strategy was his willingness to engage with the companies he invested in. He actively sought to understand their businesses, offer advice, and influence strategic decisions. This hands-on approach could add significant value, but it also required a substantial time commitment and the potential for conflicts of interest. Furthermore, the success of this approach depended heavily on Dobell’s personal judgment and relationships with company management.

In recent years, the trust experienced periods of lackluster performance, leading to increased scrutiny and ultimately, changes in management. While the underlying investment philosophy remained focused on smaller companies, the new management team likely implemented modifications to the investment process, potentially reducing the concentration of holdings or altering the approach to engaging with investee companies.

It is vital for any investor considering MIGO Opportunities Trust (or any trust following a similar strategy) to thoroughly research the current investment approach, management team, and risk profile. The trust’s net asset value (NAV), discount/premium to NAV, and ongoing charges ratio (OCR) are all crucial factors to consider. Examining the current portfolio holdings and the managers’ stated investment objectives is also essential for understanding the trust’s potential future performance.

In conclusion, the Tom Dobell era at MIGO Opportunities Trust highlighted the potential rewards, and inherent risks, of investing in UK smaller companies with a high-conviction, actively managed approach. While Dobell is no longer managing the fund, understanding his legacy and the principles of his investment philosophy provides valuable context for evaluating the trust’s current strategy and its suitability for individual investment portfolios.