The UK results season for the March year ends has not generated much investor interest – to the extent a frustrated senior equity fund manager confronted me as I walked past Mortons demanding ‘where are the Emerging Majors?!’ He was referring to an equity research note published over 20 years ago which set out the thesis that the UK Majors were ex-growth but that the Sector could offer excellent returns by investing in a select group of Mid-Caps which had outstanding managements, growth assets, strong pipelines, combined with robust finances. The list comprised Argent, Burford, Chelsfield, Frogmore and Pillar, while Core Smaller caps included Derwent, St Modwen and Shaftesbury. In hindsight, most were successful (some spectacular!) investments but not many are still listed!

The UK Majors today, with the obvious exception of Segro, suffer from legacy assets, and in particular disruption to retail markets, and legacy debt. They are of a scale where it is almost impossible for asset level activity to ‘move the needle’, but unable to fully capitalise on economies of scale. Segro’s leadership position in logistics one could argue is also a legacy, but it has taken full advantage of it’s good fortune and, in hindsight, the late Ian Coull’s acquisition of Brixton was one of the deals of the decade – buying ‘last mile’ assets around London on an effective yield of 9% off rental lows.