We offer three distinct investment strategies, focused on the natural resources sector.

Precious metals equities

Baker Steel’s precious metals equities strategy aims to achieve capital growth over the long-term from a portfolio consisting primarily of listed mid- to large- cap gold and precious metals equities. The investment strategy has a strong emphasis on identifying value and stock-picking by Baker Steel’s proven investment team.

The strategy is focused on a concentrated portfolio of high-quality gold and silver producers, with a particular focus on value and margins. The investment approach is bottom-up, utilising Baker Steel’s proprietary GenVal system to undertake quantitative company analysis alongside frequent management meetings and site visits. Our Fund Managers have strong technical backgrounds in the geo-sciences, mining, geology and engineering, providing an in-depth understanding of these sectors. The strategy incorporates a high level of ESG investment research into investment decision making.

Gold is the ultimate real asset and has proven itself as a store of wealth for millennia. Real assets such as gold tend to outperform broader financial assets during periods of persistent inflation, rising economic risk and geopolitical tension. Likewise silver offers investors all the qualities of a real asset, given its long history as a monetary metal, alongside its growing industrial usage, most notably in solar photovoltaic cells.

Gold and silver can be owned as physical bars and coins, or via exchange traded products (ETPs), however we believe the most effective way to gain exposure to the precious metals sector is via gold mining equities.

Precious metals miners offer operational leverage to rising gold and silver prices, discovery potential, and shareholder returns. At present we see substantial value in precious metals miners, which appear undervalued on a relative and historic basis. Furthermore, we believe active management is the more appropriate investment approach to the precious metals equities sector, where technical expertise and geosciences knowledge can add significant value to stock selection.

For more information on Baker Steel’s precious metals equities strategy, please contact our team.

Speciality metals equities

Baker Steel’s speciality metals equities strategy (“Electrum strategy”) aims to achieve capital growth over the long-term from a portfolio consisting primarily of listed mining equities, with a focus on the producers of those metals and minerals needed for a sustainable future.

The Electrum strategy offers a real asset focused, value-based, investment approach for taking advantage of the major global secular trends, most notable the green energy transition. The strategy builds on decades of active management experience and bottom-up investment research in the mining sector by Baker Steel’s team, while adding a top-down overlay, ensuring tactical as well as strategic asset allocation and sub-sector rotation. ESG research, using our proprietary in-house ESG screening and scoring tool, is a key element of the investment process, which is fully integrated into investment decision making.

We believe that commodities have never been more relevant for investors. Efforts to achieve net zero will transform the metals and mining industry, while competition for supplies of strategic metals and critical materials will dominate the sector in years ahead.

The mining sector lies at the centre of the clean energy transition. Investment is needed for electrification, battery technology, and expansion of renewable energy, driving demand forecasts for many commodities, most notably battery metals, along with copper. Currently investment in the mining sector remains far below the levels needed to meet demand expectations. Many commodity prices will need to be higher for longer to incentivise the necessary growth.

Investors in speciality metals mining equities, alongside processing and recycling, stand to benefit from the sector’s substantial growth potential. Taking advantage of this opportunity, however, will require navigating a range of ESG, technology and supply chain risks. Baker Steel’s team utilises a unique and value-driven investment approach, to the benefit of our clients, while adhering to sector leading ESG practices.

For more information on Baker Steel’s speciality metals equities strategy, please contact our team.

Pre-IPO and development stage mining equities

Baker Steel’s pre-IPO and development stage mining equities strategy seeks capital growth over the long term through a focused global portfolio consisting principally of the equities, or related instruments, of natural resources companies.

The strategy invests predominantly in unlisted companies (i.e. in those companies that have not yet made an initial public offering) but also in listed securities with a view to exploiting value inherent in market inefficiencies and pricing anomalies.

Investing in mining companies during the pre-IPO phase offers investors with a medium- to long-term investment horizon the opportunity to unlock deep value. Baker Steel’s strategy seeks opportunities from the initial round to late-stage financing, with the objective of achieving a value uplift via re-rating or listing. Opportunities are typically market driven, based on expectations of supply and demand imbalances across the natural resources and energy sectors.

Value can be unlocked through ‘riding’ the development curve. This concept refers to the valuation appreciation which can be achieved as a project progresses from the discovery stage to feasibility and development stages, before entering production. At each stage there is a reduction in specific risks. Investing in the development stage portion of the market requires technical expertise and industry knowledge, in order to work proactively with investee companies to unlock value. Our team’s backgrounds in the geosciences and multi-cycle investment experience adds value throughout the investment process, from identifying opportunities to assessing projects and realising proceeds.

For more information on Baker Steel’s pre-IPO and development stage mining equities strategy, please contact our team.

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