‘There’s a lot of value in emerging markets’ - Paul Niven of F&C

In this episode of the Investors' Chronicle, Val Cipriani interviews Paul Niven, Manager of the F&C Investment Trust, about the trust's strategy, performance, and outlook amid shifting global markets. Niven emphasizes the trust's long-term focus on delivering capital and income growth through a diversified, multi-layered investment approach that blends internal and external managers across listed equities and private equity. The trust maintains a 90/10 split between public equities and private equity, with a strong emphasis on diversification across geographies, styles, and managers to improve the odds of capturing long-term market drivers. Despite a challenging environment for active managers—particularly due to the dominance of the US Magnificent Seven—F&C has outperformed peers over 1, 3, 5, and 10 years, though not consistently beating the benchmark. Niven discusses tactical shifts in response to the Middle East conflict, including a recent move to increase exposure to emerging markets and the US via derivatives, driven by improved valuations and a belief in a short-lived disruption. He remains optimistic about emerging markets, especially Latin America, citing attractive valuations and reform prospects, while acknowledging risks from energy supply shocks. On private equity, Niven stresses selectivity, focusing on mid-market and lower mid-market opportunities where competition is less intense and value creation is clearer. He remains cautiously optimistic about AI's long-term benefits, though wary of near-term disruption to software firms. Overall, the trust’s balanced, disciplined approach aims to deliver consistent, risk-adjusted returns in a complex global landscape.