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Russell
Cleveland, Renaissance US Growth Trust backs Chinese and
US entrepreneurs.
“In spite
of recent falls in China’s growth rate, China will
remain the fastest growing economy in the World”,
said Russell Cleveland, manager of Renaissance
US Growth Investment Trust, in answer to investors’
questions about where to go for growth.
“China
will not be immune from recessions but the long term growth
prospects for companies investing in areas such as infrastructure,
education, medical and food and water are considerable,
partly because of the sheer scale of the Government’s
ambitions.”
To capitalise on these prospects, Russell Cleveland now
invests 50% of his portfolio in Chinese companies listed
on the US Stock Exchange, concentrating on smaller companies
with entrepreneurial management who typically have a significant
stake in the company. This is a theme he focuses on for
the rest of the portfolio seeking US smaller companies
with the ability to adapt to change and taking advantage
of infrastructure opportunities in light of Obama’s
policies.
Typical Chinese companies that he has a stake in are A-Power
Energy Generation Systems ltd. The Company designs and
constructs distributed power generation systems in China
and has won the contracts to build hundreds of wind turbines
in China. “The Chinese are committed to making
major improvements to infrastructure which gives us interesting
investment opportunities. The Government is planning to
build 10,000 miles of high speed trains and HLS Systems,
Inc., a leading infrastructure company, has been awarded
the contract are included in our portfolio. “
In terms of the outlook for the US, Russell agrees that
economic news is gloomy and that Obama is likely to be
in for a rocky start but he also believes he has brought
a new optimism to the US. This, coupled with the current
low valuations of stocks, could result in the best potential
for investors in the past 35 years. Looking back, after
the bear market of 1973-1974 the NASDAQ rose 159% during
1976-1980 compared to rise of the Dow Jones Industrial
Average. Russell invests in companies with a typical market
capitalisation of between $25million and $250million up
to a maximum size of $1billion and in answer to the question
about risk, points out that with around 60 stocks in the
portfolio, the stake in each company is relatively small.
Superior returns can be obtained over time by investing
in entrepreneurial companies. Companies he is currently
backing including Points International which has a near
monopoly on loyalty points and handles mileage for most
all major airlines.
Finally Russell highlights what he calls the First Five
Days effect as good news for markets. Looking at US historical
records, if markets rise in the first five days of the
year there is an 86% chance the US stock market will rise
over the course of the year, 2009 is looking positive.
But the key to success is stock selection as opposed to
market timing.
“2009 will be the year
when realism returns – adapting to things as they
are rather than the way we would like them to be”
he concludes.
-Ends-
Notes to
Editors
Renaissance US Growth Investment Trust plc (“RUSGIT”)
was formed in 1996 when shares were placed with a number
of UK institutions and private clients. The Trust is managed
by RENN Capital Group Inc, a Dallas-based asset manager
specialising in small “emerging growth” companies
listed in the US and Canada. These include China-based
companies with US listings.
Russell Cleveland is president and chief executive officer
of the Trusts’ manager, RENN Capital Group. He is
director of a number of US public companies, most of which
have RENN Capital as an investor.
For
more information please contact:
Lansons Communications
Henrietta Guthrie/Rachel Cashmore
0207 294 3612/ 3663
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For
more information
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Renaissance US Growth
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