The trust invests in small and mid-cap companies in a way that is similar to the private equity funds operated by Harwood. He says the trust has outperformed the market consistently for years, but acknowledges that the trust’s relatively low profile may have hampered share price performance, and it trades at a big discount.
He says the smaller company end of the market is where he finds stronger opportunities, as the bigger private equity funds tend not to get involved there, so the valuations are more attractive.
So what are his biggest red flags when it comes to assessing an investment opportunity?
Mills says: "Sometimes it feels like we have to apologise afterwards to the people who come in here to pitch. What we do is more like an interrogation, we don’t just let them read out their presentation because that’s what they have been trained to say by the brokers, and that’s no use.
"I think the biggest red flag is if they lie to me. I don’t lie to people and won’t have them lie to me. Also, I would never invest in airlines, only an idiot would own an airline in my opinion, and I wouldn’t ever invest in tobacco on ethical grounds, those products literally kill people."
Mills has no intention of stopping, or slowing the pace of his deal-making, but as he reflects on the lessons of his working life he says: “You should never change your investment strategy. And never believe it will always be the same this time. I remember when I started out in this industry, there were a bunch of stocks that were nicknamed the nifty 50, and everyone wanted to own them. A good number of them have gone bust and others, the shares feel a long way and never recovered, and maybe that’s something for investors to bear in mind.”
David Thorpe is special projects editor of FTAdviser
