The TM Brickwood UK Value Fund marked its first anniversary on 24 February 2026. Co-managed by Ben Whitmore and Kevin Murphy it has reached £220 million1 in assets under management within its first year.
Launched into an environment marked by macro and political uncertainty, the Fund has benefited from strong investor demand for a disciplined, valuation-led approach to UK equities. The Fund produced a strong absolute return over the period, reinforcing the team’s conviction that valuation remains a critical driver of long-term returns. Since launch on 24 February 2025, the Fund has returned 23%.2 Over the same period, its benchmark the FTSE All Share returned 26%.
In this video, Ben and Kevin discuss the first year managing the Fund and where they are finding opportunities today.
The transcript is below.
Transcript
How has the first year been?
Kevin Murphy (KM): The year has gone extraordinarily quickly. In the run up to launch, you are so busy. You’re trying to build all the processes, get all the regulatory permissions, make sure all the plumbing works, make sure the portfolio is as good as it can be, and then you launch. And you never know quite how it’s going to go. We’ve been very fortunate. There’s been lots of interest with journalists, from rating agencies, from consultants, and most importantly, from clients, which has allowed us, with their support, to go from zero to 200 million pounds in the first year.
Ben Whitmore (BW): It’s been an unusual environment for UK investors because actually the UK stock market has been pretty strong, and that hasn’t been the case in the years preceding that. I very much enjoyed, if you like, reuniting with Kevin. Kevin and I worked together about 20 years ago, and as two value investors who trained in the same place, it’s been very nice reuniting with him. And we haven’t really missed a beat in terms of how we approach it with the same value philosophy, same investment process. And so, yes, I’ve really enjoyed it.
KM: Ben was my mentor when I started working in the city. We worked together for six years before we then become rivals for the next 18. Given that shared foundation, it’s no surprise that we share a common investment philosophy. What has been very encouraging is that it’s not just the philosophy we share, it’s how we think about stocks. It’s the time horizon, it’s the turnover, it’s the focus on the fundamentals, it’s the way that we think about how you build the best portfolio you possibly can. As an investor, Brickwood has been everything I wanted it to be.
What has been your best performing stock?
BW: Yes, so the UK has quite a reasonable mix of companies. And actually, one of our strongest returning companies has been a company called Airtel Africa. It’s listed in the UK, but has the majority of its operations in Africa.
KM: Over the last couple of years, there have been concerns about its exposure to Nigeria, and in particular the Naira, the Nigerian currency. But when the market was worried about these things, what it was missing was that there were some strong underlying fundamentals operating in their favour. In their markets, they had population growth. They had phone penetration increasing. As people bought phones, they were signing up to the data packages. And people with data packages were signing up to use more and more data. And these strong fundamentals were ignored by the market because of these concerns about the currency. And as a consequence, you were able to buy this exposure for a very significant discount to its fair value. And during 2025, as the Nigerian currency situation rectified itself, the share price immediately doubled, and that has been extremely favourable for our portfolio.
What hasn’t worked so well?
KM: Things that haven’t worked quite so well might be what you might call AI impacted stocks or AI losers. The market is absolutely convinced, despite the fact that it’s still early days for AI, as to who will be the winners and who will be the losers. Hayes and WPP are both in our portfolio and have both suffered as a consequence.
But the market is absolutely certain, sufficiently that Hayes is a recruitment consultant, and its valuation today is even cheaper than it was in the credit crisis and in [the] COVID period – times when there was almost zero hiring. That’s how confident the market is that Hayes is in significant trouble.
But of course, AI does bring challenges, but it brings benefits and it brings opportunities alongside weaknesses. So if I wanted to apply for a job today, I could tailor my CV to apply to 500 jobs instantly by just putting it into an AI search engine and saying, “tailor this CV”. It means HR departments are being inundated with CVs for every single vacancy they have. And how do you rectify that? You need some help. And the recruitment consultants, with their ability to sift through CVs and their knowledge of the underlying candidates allows HR departments to cope in that environment. So yes, AI will bring challenges, but it will also bring opportunities for some customers.
Is AI excitement leading to another dotcom bubble?
BW: I think in the UK market at the moment, there isn’t that sense of the dot-com bubble, no. The UK doesn’t have a very significant exposure to the current desire and interest in AI. But there are always areas of very high valuation where people are very excited. So two areas where people are very excited at the moment are defence and copper. So copper shares are very, very highly rated. Defence shares are very, very highly rated. So we might not have an AI boom in the UK market, but we always have areas of very high valuation, and very low valuation. And really, it’s our judgement to find those areas of low valuation.
Although we don’t have the big AI companies like America has, AI has affected the UK stock market in a different negative way. People are worried about what happens to data and software companies in a world of AI. So the UK has got quite a few data and software companies, and those have actually been very weak in the last three to six months.
The few companies that we have that probably directly benefit from AI would probably be, I think, in mining. These enormous data centres require a lot of copper and electrification, and the copper exposed most miners in the UK – I mentioned Anglo-American – they’ve done very, very well. But those valuations now are very high, and so we’re definitely not as keen on them anymore.
What has been driving the UK’s strong performance?
BW: So the UK stock market has performed quite strongly, but it’s been really in several narrow areas. So financials have been very strong, mining share have been very strong, defence companies have been very strong. The other bit of the UK market that’s been very noticeable is it’s really been led by the largest companies, not small and medium-sized companies. So there’s been quite a divergence between the returns of large and mid and small.
How has that influenced the portfolio?
KM: Outside of the US, financials have been the best performing sector in the world. The UK has a large financial sector, so it’s no surprise that financials here have been dominant. Three years ago, they were extremely cheap and extremely attractive. They traded at large discounts to book value, operating really, really well. And with that excess capital, they were buying back shares, which at a discount to book value, magnifies the gain for all ongoing shareholders.
But fast forward three years and a significant rally, that situation has changed. They now trade at a premium to book value, so buybacks are now dilutive to ongoing shareholders. The structural hedges are one year closer to maturity. And the share prices are simply much higher. So they deserve to be a smaller proportion of our portfolios than they used to be in the past.
Has there been much turnover in the fund?
KM: So historically, our funds have all been low turnover, and they will be at Brickwood as well.
BW: We’re never buy and hold investors and then hold the same companies over time. So for us, it’s all about trying to capture the change in valuation from a low valuation where the stock market is worried about things, to an average or high valuation when the fears dissipate. So the portfolio will always turn over.
KM: Over the course of the last year, we have sold out of our Airtel Africa position entirely, and also our Dr. Martens position entirely as it significantly outperformed other cyclical areas. We have trimmed our exposure to mining, defence, and financials.
BW: So the portfolio will always turnover, and it will probably take about four to five years to turn over the portfolio, but we’ll be very valuation-driven. So we’ll always be looking to refresh the portfolio with new low valuation ideas.
Where are you finding opportunities today?
KM: If we were to try and classify where the opportunities are today, I think the term ‘faded glamour’ might be the appropriate one. It’s not a specific sector that’s attractive, but a theme. It’s companies that the market loved three years ago, which have all come under pressure. Now, not every one of those companies is cheap. There are some that were sufficiently expensive three years ago, that even though they have halved, they’re still extremely expensive. But as selective value managers, we can find companies with strong cash generation, great balance sheets, attractive operating characteristics, but valuations that now fulfil our criteria.
That was not true at the inception of the Brickwood portfolio, but those faded glamour stocks are now very much on our horizon. So we’re buying into stocks like Diageo, JD Sports, and Bunzl. And because they’re not in one specific sector, it allows us to build a diverse, attractively valued portfolio.
BW: Yes, I think that last year, one of the worries in the UK stock market has been the performance of the domestic UK economy. People have been very worried about the additional tax burden on consumers, the tax burden on businesses. And so quite a few shares that have done pretty poorly last year are quite exposed to the UK domestic economy. So we have got quite a few investments there because there does seem to be quite a lot of value there. For example, we’ve got a house builder that’s trading on a significant discount to book value. We’ve got a value retailer that’s trading on probably the lowest valuation it’s ever been on. So I think some of those domestic areas are giving a bit more opportunity.
Do you invest in any overseas stocks?
KM: As a UCITS portfolio, the [TM] Brickwood UK Value Fund is allowed to have up to 20% in non-UK holdings. When we’re thinking about how to utilise that exposure, we use it in two main ways. The first is to gain exposure to areas that we can’t get in the UK, sectors that simply don’t exist here. Things like autos, so we have exposure to Continental within our portfolio today, but also areas where, yes, they do exist in the UK, but there’s not sufficient stock diversification to allow us to build a balance that we may like. An example there would be in the pharmaceutical space, which although the UK has some names, they may not be as cheap as we can get elsewhere. And as a consequence in our portfolio, to build the balance we’re looking for, we also have exposure to Sanofi, which we think is a very cheap, attractively valued pharmaceutical company.
How much crossover is there with the global fund?
BW: Clearly, they’re very different. The UK fund is about 90% invested in UK-listed companies. The global fund has exposure ranging from America to Brazil, to Indonesia, to South Korea, to Japan. So they are very, very different. They’re linked by a common philosophy and investment process, but clearly they’re very different funds.
What can investors expect in the future?
KM: We can only guarantee one thing. We will be the best value-based portfolio that we possibly can. As the value opportunity moves in the market, so will our portfolio. There’s no one theme or no one sector that will always be there. As the opportunity moves, so will we.
Now, over time, there are times when the market doesn’t care about valuation, times like COVID, when a valuation-based strategy doesn’t help. In those times, the only thing you can do is focus on the fundamentals, ensure the companies have strong balance sheets, and then wait for the storm to pass. And when it does, the returns tend to more than compensate you for those moments of weakness.
The other thing that we’re very confident about is that over time, valuation-based strategies have outperformed, and we see no reason that that won’t be the case going forward.
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