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TM CRUX European Special Situations: September 2021 update

Investments can go down as well as up so there is always a danger that you could get back less than you invest. Nothing here is personalised advice, if unsure you should seek advice.
  • CRUX Asset Management is employee owned which we like as it aligns the managers’ interests with investors
  • The team cast the net wide to find investment opportunities but maintain a tried and tested, disciplined investment approach
  • Richard Pease has a good long-term track record of investing in Europe and is part of a close knit and knowledgeable team
  • The fund is on our Wealth Shortlist of funds chosen by our analysts for their long term performance potential

How it fits in a portfolio

TM CRUX European Special Situations aims to grow investors' wealth over the long term by investing in European companies of all sizes. This includes large, medium-sized and smaller businesses. The latter could boost growth because these companies are at an earlier stage of their development, but that also makes them higher-risk. The fact the fund invests in a relatively small number of companies is also a higher-risk approach. We think the fund could be used to diversify the European part of an investment portfolio, or a broader global portfolio focused on long-term growth.


Richard Pease is a fund manager we've rated highly for many years. He's invested in European companies for more than three decades and built impressive knowledge of the market over this time. He ran the Jupiter European fund from 1987 and later joined Henderson in 2001 where he ran a number of European funds, including launching the European Special Situations Fund in 2009. He took the fund with him after he helped to set up the investment boutique CRUX Asset Management in 2015, and the fund became the group's flagship product.

Pease isn't a one-man band when it comes to running the fund though. He has a team of investors around him, including co-managers James Milne and Roland Grender, to help look for what they think are the best investment opportunities. We think each member of the team brings different skill sets to the fund, which should also lead to a healthy dose of challenge and debate.


Pease is a true stock-picker at heart. He's steadfast in his focus on the prospects for individual companies, instead of wider economic events that are less likely to impact share prices over the long run.

For this fund he uses the same investment process that's been in place since he started his investing career. The companies he invests in should generate strong cash flows, recurring revenues, and have little or no debt. He likes businesses that do something unique and offer a product or service that other businesses struggle to replicate or do better. They should also be run by a management team with a proven track record of running a successful business. Company management will also typically own part of the business, making it more likely their interests are aligned with other shareholders.

Pease invests in companies of all sizes. Larger, well-established companies can be better at fending off competition because they're able to keep costs lower. Smaller companies can often grow quicker because they're more nimble and can develop new products at a quicker pace. He often likes companies that are based in Europe but do business across the globe , so they're not only dependent on customers in the countries they're based. He also invests in a few companies based outside of Europe to compliment and diversify the fund.

The fund has a good balance of companies. Some pay an attractive dividend including Nordic insurance group Sampo. Others have superior long-term growth potential, such as German business software provider SAP. There are a handful with a foot in both camps such as Italian online broker Fineco.

New investments over the last 12 months include online food delivery platform Just Eat, freight and logistics company DSV Panalpina and Nordic bank Nordea. Investments sold over the last 12 months include Equiniti and Globalworth, which received bids to be bought by other companies, and Kerry Group which no longer offered as much value after its share price rose.


We think Pease and his team are well-incentivised to deliver good returns for investors. Pease is a founder and shareholder of CRUX Asset Management, while Milne and Grender are also shareholders. This should ensure they want the best for both the business and investors. Part of their remuneration is also based on fund performance, so again they are focused on investor outcomes.

Pease is a director at CRUX and lead or co-manager of a number of European funds. While this increases his responsibilities, each of his funds is focused on European equities and they are run using the same strategy that has been in place for many years.

Overall, we think the set up at CRUX is attractive. It focuses mainly on European and UK equities and is home to a close-knit investment team. Recently CRUX hired Ewan Markson-Brown from Baillie Gifford to manage an Asian equity fund, which will broaden the product line. As a boutique investment house, the managers can maintain flexibility over their investment approach.

The team has integrated environmental, governance and social factors into their work for a number of years. They believe this helps to highlight businesses that use more sustainable practices and could thrive over the long term. It could also uncover risks that are less obvious through more traditional company analysis. Engagement is a key element of their investment approach and they maintain close contact with company management to gain a full understanding of the business strategy.


This fund's annual ongoing fund charge is 0.88%, but after a 0.14% saving it's available at 0.74% through the HL platform. This makes it one of the cheapest actively managed funds in the European sector available through HL. The saving is achieved through a loyalty bonus, which could be subject to tax if held outside of an ISA or SIPP. The HL platform fee of up to 0.45% per year also applies.


Pease has an enviable long-term track record of investing in Europe. His funds have performed better than the broader European stock market and peers over the length of his career, though past performance shouldn’t be seen as a guide to the future.

Our analysis suggests he has a good long-term stock-picking record, which means many of the companies he invests in have performed well regardless of their size, sector or location. Over longer periods, his funds have tended to hold up better in more turbulent markets, which we expect given his focus on quality companies. Past performance is no guarantee of how a fund may perform in the future however.

Over recent years the fund hasn't performed as well as the FTSE World Europe ex UK Index or peers. Many investors have favoured so-called 'growth' stocks, known for their perceived high-growth characteristics, or more stable earnings profile. While Pease invests in some of these companies, he also invests in undervalued companies he believes have good prospects but are yet to be noticed by others. These shares can often be bought at relatively depressed prices. Some of these businesses have been out of favour with many investors, putting pressure on the fund's performance.

Over the last 12 months the fund has returned 25%* vs 27.4% for the index and 26.8% for peers. The managers focus on the merits of each company rather than its sector or which country it is based in, so there is a wide variety of investments in the fund. This provides greater potential for the fund to outperform, though the reverse is also true, and performance will look different from the index at times. Past performance isn’t a guide to future returns.

Investments that have performed well for the fund over the past year include the Austrian bank Bawag, French network developer Spie and Swiss logistics group Kuehne Nagel International. Holdings that detracted included German stock exchange operator Deutshe Boerse, the Dutch internet conglomerate Prosus and Spanish pharmaceutical company Grifols.

Annual percentage growth
Aug 16 - Aug 17 Aug 17 - Aug 18 Aug 18 - Aug 19 Aug 19 - Aug 20 Aug 20 - Aug 21
TM CRUX European Special Situations 21.9% 2.0% -1.8% -1.4% 25.0%
IA Europe Excluding UK 23.5% 2.7% 0.3% 3.5% 26.8%

Past performance is not a guide to the future. Source: *Lipper IM to 31/08/2021

Find out more about TM CRUX European Special Situations including charges

TM CRUX European Special Situations Key Investor Information

Important information - Please remember the value of investments, and any income from them, can fall as well as rise so you could get back less than you invest. This article is provided to help you make your own investment decisions, it is not advice. If you are unsure of the suitability of an investment for your circumstances please seek advice. No news or research item is a personal recommendation to deal.

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