Invest. Invest. Invest. Taxation. Taxation. Taxation. Is this the mantra and the reality of the Labour government's first budget in almost fourteen years?

Financial economist Victor Hill explains whether the current economic climate and the new Chancellor's measures will reanimate growth in the UK against the country's debt to GDP ratio of over 100%.

Hill calculates that by the end of the decade, the U.K. will still be rumbling along with a growth rate of around 1.2 to 1.4% which he says is not disastrous. What may put a spanner in the works for UK exporters though is another Trump presidency which has a fondness for tariffs on non-US made products.

While Rachel Reeves' budget is still being scrutinised, Hill says the market expects more details to come about the measures and headline statements. The Bank of England has capitulated on its interest rate predictions before and time will tell if Reeves, as a former Bank of England economist, will do the same.

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Brusk Korkmaz is keen to stress that the company he started in his spare bedroom 16 years ago is very much the shareholders company now.

The business is Hercules Site Services (LON:HERC) and since 2008 the tech enabled construction company has grown every year with the exception of the year when Covid impacted businesses globally.

Korkmaz is delighted with the recent financial milestone the business has achieved – that of the anticipated £105 million turnover for FY24 which is well ahead of market expectations.

"We can confidently say that we are well placed to continue growing organically each year," says Korkmaz.

Hercules supplies both labour and white collar staff to blue chip clients in the infrastructure and construction sectors. It also has a construction services division where it takes on civil projects in the water industry and has a much-used excavator hire service solution.

Significantly it has novel and modern methods for recruitment. It opened its Construction Academy at the beginning of the year to upskill existing and train up new entrants and has a recruitment app which alerts workers to available opportunities.

With some £775 billion earmarked for investment in the infrastructure and construction sectors over the next 10 plus years, Hercules is positioning itself for opportunity and to help it grow organically and by acquisition it has successfully raised £8 million for that purpose.

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Onward Opportunities Limited (LON:ONWD) was launched in March 2023 and just over one year later the investment company was crowned IPO of the Year at the 2024 Small Cap Awards. 

Lead Fund Manager Laurence Hulse can only speculate why his company won the accolade. "We did what we said we would do. We raised some money. We invested it well and we've grown as a business and created value." 

Onward’s purpose, says Hulse, is to aggregate a portfolio of investments, an eclectic mix of ideas and opportunities that could generate a lot of value. Indeed over the past twelve months the net asset value of the portfolio has increased by some 20%.

"The return we generated last year was in quite a severe bear market for AIM. This year things are looking a little bit more helpful and robust and reducing political uncertainty, I suspect, again, is helpful. There's a very, very healthy pipeline of opportunities to go for in H2. We've delivered 9% so far in the first six months of calendar year ‘24. Our aim is to try and do the same again in H2."

Hulse talks about the ‘dawn and dusk’ ethos of the company’s investment strategy giving portfolio constituent the housebuilder Springfield Properties as an example. After trading at "a deep discount to book value after a tough couple of years for house building, now we think that sort of journey is over", says Hulse. "Perhaps the shares are overlooked and offer value. So far that's been the case. The shares are up about 30% from where we bought them and still trade at a pretty clear discount to book value."

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Created by the 2023 merger of finnCap and Cenkos Securities, Cavendish Plc's (LON: CAV) remit as the U.K.'s newest investment house is a large one. 

Joint chief executive Julian Morse describes the business as a 'full service investment bank'.

"We do everything from the equity capital market side. Look after companies as their brokers, help them raise money, produce research on all of our companies and others in the market, financial advice, but also go right across the spectrum to working with private companies."

In addition to Cavendish having highly regarded M&A and debt advisory departments, it also has one of the AIM market's largest equity capital markets tech team.

Tech in all its forms of MedTech, FinTech, MediaTech ad infinitum is one sector that contributes to the myriad small-cap growth companies that are the backbone of the U.K. economy and the ones that Cavendish is keen to support.

Cavendish is however firmly sector agnostic with a laser like focus on supporting small and medium enterprises. The ones that Morse says "foster innovation, entrepreneurialism and effectively give the economy a huge boost".

Cavendish itself fosters not just innovation, but loyalty keeping all of its client facing personnel and retaining 'all of that talent' after the combination of the two brokers which Morse describes as a true merger.

The company is now hiring as it expands 'cautiously'. By virtue of the business it is and as a listed entity, Cavendish is chasing results deploying "a platform that can be profitable, even in very tough markets".

Cavendish has been nominated as Broker of the Year in the 2024 Small Cap Network awards.

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As the world's first listed space tech fund, Seraphim Space Investment Trust has a first mover advantage in a sector that is starting to get crowded.

Private equity, sovereign wealth funds and climate-related funds are now appreciating what Seraphim had predicted years ago in that space tech provides the utilities required for sustainability, digitisation, climate protection and national defence.

Managing director and chief executive Mark Boggett says with its 126 strong space tech company portfolio Seraphim is "the most prolific and most active investor in the space market".

He talks about how economies are intrinsically linked to space related activities. "If you were to switch off the satellites", he says, "the loss to the U.K. over seven days would be $7 billion."

Boggett says the industry globally is worth $450 billion a year, and a few of the companies in Seraphim’s portfolio have already achieved single digit billion dollar valuations and "there's plenty of scope for them to be valued in tens of billions and beyond during the course of the next few years and we believe that there is evidence they are heading in that direction".

He and his team aspire to, and are accustomed to big numbers and big concepts.  Chairman Will Whitehorn was a founding member of Virgin Galactic and advisor to Sir Richard Branson as was Seraphim’s Richard McCall. The roll call of entrepreneurial greats is a force that is strong within the company and includes Maureen Haverty, who was COO at space startup Apollo Fusion that was acquired for $145M. 

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With economic indicators suggesting the U.K. isn't in as dire a condition as predicted, inflation tamed and the possibility of an interest rate cut just who are the beneficiaries?

In this Master Investor webinar, Jonathan Davis talks to Sarah Lowther about how a reduction in the Bank of England's base rate could provide a fillip to the stock markets as it offers relief to companies with stretched balance sheets and stimulates the property market.

They discuss the perils of elevating fund managers into rock stars and unpick both the open-ended funds and investment trusts that are doing well and the renewables vehicles on course for a rebound. Davis calls out JP Morgan's Global Growth & Income Trust, Greencoat UK Wind and Bluefield Solar Income Fund as investments that have provided solid returns. 

"I wouldn't be surprised if you buy them and own them, you're going to get something like nine or ten percent compounded return over a period of years," says Davis who reminds investors that at the same time "You're doing something for the country. You're doing something for climate change."

Davis suggests the second quarter of 2024 may not see an extension of the optimism that has buoyed UK markets so far this year. He does though encourage adopting a long-term strategy to combat any short-term frothiness in stock exchanges. 

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EnSilica Plc's (LON: ENSI) aim is to be recognised as Europe's leading ASIC supplier.

ASIC is the acronym for Application Specific Integrated Circuits which helps the analog world marry with the digital.

ASICs currently represent approximately seven percent of a silicon chip market forecast to grow to a trillion dollars by 2030. Within that space EnSilica customises ASICs for customers, and the bespoke benefits include better data security and supply chain resilience, which in a supply chain challenged world is a huge bonus. 

For more investment and economics analysis plus inspiration please visit our website masterinvestor.co.uk. 

The fifteen acquisitions that Trident Royalties Plc (LON:TRR) has made in just over three years has been described as a "blistering pace" by its chief executive Adam Davidson. 

Positioned in the resource sector, Trident acquires royalties in mining companies, and in doing so is entitled to a percentage of generated revenue.

"The mining royalty sector is not tiny,' says Davidson. "It's $80 billion in aggregate market cap of mining companies around the world."

While other royalty companies focus mainly on gold, Davidson realised there was a gap in the market for "a multibillion-dollar market cap diversified mining royalty company that's got iron ore and copper and zinc as well as gold."

Trident is building a pure diversified royalty business. This year it's made five acquisitions across copper, gold, silver, and mineral sands and Davidson is wanting to add nickel and zinc to the portfolio. 

"We're trying to come up with an index fund style exposure. You can get your exposure to real assets to mining commodities through your holding and Trident because we get a royalty exposure across the whole depth and breadth of the sector."

With a robust register of institutional shareholders, the board is in alignment with its investors with directors buying shares when they can.  The ultimate ambition according to Davidson is to build more scale within the portfolio and announce an inaugural dividend "when we can put in place a policy that's progressive."

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In addition to expanding resources to accommodate its growing register of really large and regular customers, Cerillion PLC (LON:CER) has added Generative AI into its product set which gives clients more tools to monetise existing infrastructure.

"It's going to be revolutionary across the board", says founder and chief executive Louis Hall, and he should know. He's been with the billing, charging and customer relationship management software solutions provider for over two decades and has been quick to adopt and provide initiatives for customers looking for economical solutions that can be deployed quickly.

"A task that might take a good product marketing person, a couple of days sometimes can be completed within minutes", says Hall who recognises that AI is just as useful a tool for Cerillion itself 'in terms of productivity in developing and maintaining software'.

With the most recent figures showing record financial performance, the GenAI offering is one device dedicated to protecting Cerillion's long-term recurring revenue growth.

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Manx Financial Group PLC (LON: MFX) celebrated a financial services first in October 2023 when its Conister Bank became the first Isle of Man bank authorised to accept deposits in the United Kingdom.

Chief executive Douglas Grant says being awarded a UK Branch Banking Licence demonstrated regulatory recognition of the company's "really transparent operating business model based on sound economics".

Expansion of the group's overall model says Grant will come through diversification. It will come from organic growth, acquisition and backing management teams. "We've got almost like an incubator kind of theory", enthuses Grant who references an FX business the company backed from 'zero' which now "makes a million pounds a year for us".

Depositors also have the company's back with Conister Bank passing on interest rate increases to its savers. While that magnanimous gesture resulted in corporate margin contraction, more importantly it made for happy customers.

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In times of turbulence, the right investment decisions can make all the difference. Master Investor partnered with Netwealth to help you navigate the economic landscape with confidence and maximise your investment potential in 2024.

Master Investor’s Sarah Lowther is joined by Netwealth’s Iain Barnes to share his expert insights and perspectives on the volatile financial markets as well as tools and resources you can use for your own wealth management going into 2024. 

For more investment and economics analysis plus inspiration please visit our website masterinvestor.co.uk.