Deep Dive #6: Data Centres

Many of our investors will have heard us speak about the growing importance of intangibles when valuing companies. When we model the finances of companies, our Analysts make
economic adjustments to the traditional balance sheet to reflect intangibles that we wish to consider as assets rather than costs, for example, the capital invested into research & development and brand value.

Understanding the value of such intangibles is ever more important in a world that is increasingly built and led by ground-breaking developments in the fields of science and technology. The rise in intangible asset values across the constituents of the S&P 500 over the last 50 years is no surprise given that in 1975, the largest company in the index was Exxon Mobil, a company valued largely on its tangible oil reserves. Today, the index is dominated by Big Tech – Apple, Microsoft, Amazon, Alphabet – companies that have huge intangible asset values. A similar picture exists across our Approved List of companies, especially for those businesses in the Montanaro Global Innovation Fund.

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