Richard Scrope has more than 12 years of industry experience and currently runs the VT Tyndall Global Select fund, having brought the FP CRUX Global fund to Tyndall Investment Management in August 2018. Prior to Tyndall, Richard managed the CFIC CRUX Global and European funds. He joined CRUX at the start of 2017, bringing both funds with him from Oriel Asset Management. Prior to entering the City, he served as a British Army officer and then worked at JP Morgan Chase Private Bank. He holds a Bsc in mathematics from the University of Edinburgh and is a Chartered Financial Analyst.
The past couple of years have seen levels of destruction around the world not seen since the Second World War, and the amounts spent by the warring factions and their supporters has risen to many billions of Dollars. Before the Hamas assault on Israel on 7th October 2023, the Israeli government spent $1.8 billion per month in military spending. However, according to the Stockholm International Peace Institute, this number had risen to $4.7 billion per month by the end of 2023 and now accounts for 9% of GDP. By September last year, according to the Watson Institute for International and Public Affairs, the US had spent $22.76 billion on Israel’s military operations and this figure will have increased significantly since then.
The $23bn that the US has spent on the operations in Gaza and Lebanon is dwarfed by its assistance to Ukraine, where it had committed over €100bn in aid and military assistance prior to President Biden’s recent additional support. Europe in comparison had committed over €140bn in the same period.
Whether the peace treaty signed between Israel and Hamas over the weekend really constitutes ‘Peace in our time’ or like Prime Minister Neville Chamberlain found out, that it simply postpones the offensive, remains to be seen, but any cessation to the destruction and suffering should be welcomed.
Today marks the second coming of President Trump, and he has been vocal about how he thinks that the US should not be spending such enormous sums on international operations, that other NATO members should not be reliant on US support and spending a greater percentage of their GDP on defence, and that he could stop the Ukraine war ‘within 24 hours of taking office’.
However unlikely the last point may be, the fact that Vladimir Putin has said that he is willing to speak to President Trump about peace is a step in the right direction. Even if Kyiv and Moscow still seem leagues apart in on what terms they would stop the war that has so far claimed more than 38,000 Ukrainian and over 115,000 Russian lives, although the later number varies wildly depending in which source you believe; Ukraine claims that it could amount to 814,000 killed or wounded.
If peace can be found, the world may benefit from a peace dividend, not only in terms of human life, but also in economic terms. Theoretically one might think that there would be a significant reduction in defence spending, and this would be to the detriment of the arms manufacturers. However, one of the notable contradictions of the past three years has been the relatively modest increases in the value of most defence companies, and that despite the scale of the US’s spending, European names have outperformed; Rheinmetall being the main beneficiary.
The scale of destruction caused by modern day warfare has left regions without any infrastructure, energy or even habitable buildings, and the reconstruction efforts will take years and cost trillions of Dollars. Given the nature of the wars in Ukraine and Palestine, it is unlikely that either side will be willing to pay reparations or fund the redevelopment of the opposing parties’ lands. Particularly in Ukraine, where the economy has been devastated by the war, it will be unable to pay for the rebuilding of its war-torn areas.
International aid and generosity will be a necessity for a return of cities into habitable areas, and for utilities and services to be restored. The rebuild should see a boost for construction and infrastructure companies worldwide, with substantial projects that could last numerous years. While investors may have not significantly benefited from investing in defence companies over the past three years, it is highly possible that the rebuild will offer opportunities in many of the companies that are likely to be involved in the rebuild once peace is restored, which are wide ranging in nature, many of which have not fully participated in the re-rating of Global markets over the past few years.
WARNING: All information about the VT Tyndall Global Select Fund(‘The Fund’) is available in The Fund’s prospectus and Key Investor Information Document which are available free of charge (in English) from Valu-Trac Investment Management Limited (www.valu-trac.com). Any investment in the fund should be made on the basis of the terms governing the fund and not
WARNING: All information about the VT Tyndall Global Select Fund(‘The Fund’) is available in The Fund’s prospectus and Key Investor Information Document which are available free of charge (in English) from Valu-Trac Investment Management Limited (www.valu-trac.com). Any investment in the fund should be made on the basis of the terms governing the fund and not on the basis of any information provided herein.
The information in this Report is presented using all reasonable skill, care and diligence and has been obtained from or is based on third party sources believed to be reliable but is not guaranteed as to its accuracy, completeness or timeliness, nor is it a colete statement or summary of any securities, markets or developments referred to. The information within this Report should not be regarded by recipients as a substitute for the exercise of their own judgement.
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Investment Manager: 5-8 The Sanctuary, London, SW1P 3JP
Tyndall Investment Management is a trading name of Odd Asset Management. Authorised and regulated by the Financial Conduct Authority (UK), registration number 660915. This status can be checked with the FCA on 0845 730 0104 or on the FCA website (UK). All rights reserved. No part of this Report may be reproduced or distributed in any manner without the written permission of Tyndall Investment Management.
Investment Manager: 5-8 The Sanctuary, London, SW1P 3JP
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