"Some three months ago I found myself stranded in Geneva airport, unable to make it to a crucial board meeting in LA. Not a lot I could do about it, so I just contemplated the scene. The place was a sorry sight – masses of people huddling on benches, sleeping on the floor, all flights indefinitely cancelled."
Darcy Kopcho, one of Capital's Global Equities Fund's four portfolio managers, was among the hundreds of thousands of frustrated passengers whose travel plans were thrown into disarray by the volcanic ash spreading across European skies. Curious as ever, Darcy ruminated over the likely consequences of the eruption; it was obvious that airline stocks would suffer a setback, but were there some industries and companies that could potentially benefit from the situation?
A few e-mails later, Capital's global army of diverse professionals was mobilised. Analysts and portfolio managers conferred with a renowned volcanologist: what was the likelihood of repeated eruptions in the future? They sought out intelligence from Capital's technology experts: which businesses were best positioned to gain from a potential decline in travel? Equipped with a multitude of fresh insights, Darcy and her colleagues thoroughly examined the pros and cons of every opportunity that came to light.
The outcome? Renewed conviction in select IT holdings with teleconferencing businesses. Given recent advances in technology, teleconferencing has become an increasingly viable alternative to actual travel, and its long-term prospects look promising. Furthermore, many teleconferencing facilities generate comfortable revenue streams once they are installed.
"You couldn't have done what we've done in a matter of days without the depth and diversity of knowledge we have at our disposal within Capital. It was a perfect example of how we tend to work: an individual's conviction is scrutinised by the relevant specialists and, if the idea holds water, we may have just discovered a gem."
If you would like more information or support, please contact our distributor, Pinnacle Investment Management, on 1300 010 311.