Investment Community

Greg Hopkins, co-CIO of PSG Asset Management, was my special guest on the Investment Community podcast.

In this episode:

* The PSG team shops in uncrowded areas of the markets, those that are generally associated with fear and uncertainty. Difficult market conditions present the best investment opportunities and often represent a change in market leadership.

* Their team-based decision-making process means that culture is even more important than it otherwise might be. Greg describes the team’s culture as low-ego, high-trust, active and open-minded.

* The team is able to “hold the line” in the face of disconfirming data from the markets and negative feedback from stakeholders. This ability was tested and ultimately strengthened during a period of underperformance in 2019/2020. 

Greg Hopkins is co-CIO of PSG Asset Management and a fund manager on the firm’s global funds. He started his investment career in 1997 at Merrill Lynch Investment Managers in London (now BlackRock). He did short stints as an emerging market analyst and in the fixed income team, but for the majority of his 9 years at Merrill he was in the global value team, focusing on European equities. After a brief time as a hedge fund manager at Cambrian Capital, Greg returned to South Africa and a position at Sanlam Investment Management, where he spent 3 years working on their Best Ideas Fund. In 2010, he joined PSG Asset Management, and in 2012 became the firm’s CIO.

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John Biccard, PM at Ninety One, was my special guest on the Investment Community podcast.

In this episode (part 2 of 2):

* John explains the cyclicality in the relationship between growth and value stocks, and explains how prospective returns have changed during the era of free money.

* He discusses how the valuation gap between growth and value has contracted recently, but still remains very extended.

* He believes that bond and equity markets are pricing in a 2% US inflation rate but if it’s higher, growth stocks will take a disproportionate share of the pain.

John Biccard is a portfolio manager at Ninety One, where he has responsibility for the firm’s Value Equity Strategy. He began his investment career in 1990 as an analyst at Simpson McKie Stockbrokers (which is now HSBC Securities), and later became head of financial and industrial research, as well as a director of the company. John then spent two years at HSBC Asset Management as a director of institutional asset management before he joined Ninety One (then Investec Asset Management) in 2000.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit newdigate.substack.com

John Biccard, PM at NinetyOne, was my special guest on the Investment Community podcast.

In this episode (part 1 of 2), John tells:

* That the extra returns you earn over time as a value manager are appropriate compensation for living a miserable life.

* That his ideal investment idea is one that causes others to laugh with incredulity and question his sanity.

* That it is sheer folly to assume that the market is right - it’s way better to do the work and reach an independent conclusion.

John Biccard is a portfolio manager at Ninety One, where he has responsibility for the firm’s Value Equity Strategy. He began his investment career in 1990 as an analyst at Simpson McKie Stockbrokers (which is now HSBC Securities), and later became head of financial and industrial research, as well as a director of the company. John then spent two years at HSBC Asset Management as a director of institutional asset management before he joined Ninety One (then Investec Asset Management) in 2000.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit newdigate.substack.com

Richard Pitt, CEO and PM at BlueAlpha Investment Management, was my special guest on the Investment Community podcast.

In this episode (part 2 of 2), Richard tells how:

* Frequent trading is not a good way to invest, and it’s a terrible way to live.

* Articulation of your investment approach is vital - allocators need to have a clear idea of what they’re buying because they’re building portfolios of exposures.

* Ultimately your competitive advantage might boil down to: knowing who you are, investing in a way that’s consonant with who you are, and sticking to your approach through the tough times.

Richard Pitt is CEO and portfolio manager at BlueAlpha Investment Management. He began his investment career in 1995 as an equity analyst at Old Mutual Asset Managers. After a short stint as a portfolio manager at Brait Asset Management, Richard became co-manager of Decillion Capital’s Big Rock hedge fund. He relocated to London with Decillion and co-managed their US/European hedge fund. He joined BlueAlpha in 2003 and his primary focus is global investing.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit newdigate.substack.com

Richard Pitt, CEO and PM at BlueAlpha Investment Management, was my special guest on the Investment Community podcast.

In this episode (part 1 of 2), Richard tells:

* How, as a rookie analyst in a bull market, his first recommendation was a sell. That company (Toco) eventually went bust.

* What the consequences can be if you focus on performance and accolades rather than risk, especially when market conditions change.

* How he is increasingly motivated by enabling people to grow, and that his ambition has shifted from making money to the upliftment and empowerment of others.

Richard Pitt is CEO and portfolio manager at BlueAlpha Investment Management. He began his investment career in 1995 as an equity analyst at Old Mutual Asset Managers. After a short stint as a portfolio manager at Brait Asset Management, Richard became co-manager of Decillion Capital’s Big Rock hedge fund. He relocated to London with Decillion and co-managed their US/European hedge fund. He joined BlueAlpha in 2003 and his primary focus is global investing.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit newdigate.substack.com

Monene Watson, CIO of Old Mutual Multi-Managers, was my special guest on the Investment Community podcast.

In this episode, Monene tells:

* How difficult it is to assess whether underperformance by a fund manager is due to a broken process (in which case the manager should be terminated), or if it’s due to a temporary shift in market dynamics (in which case the manager should be given time).

* How she respects fund managers who are self-reflective and have the ability to admit their mistakes.

* How the focus has shifted from identifying star fund managers to identifying investment teams with great cultures.

We also discussed:

* That her advice to fund managers is that they should make it easy for investors to understand that the managers know what they’re doing. They should have clarity about their edge and be able to articulate that edge.

* That there’s a big difference between assessing other investors and yourself being accountable to clients for your investment decisions.

* That it’s important to distinguish between feelings and valuations, and it’s important to understand both yourself and markets.

Monene Watson is CIO of Old Mutual Multi-Managers. She began her career in the 1990s as a performance analyst at Old Mutual Asset Management. She then went to London and worked at Merrill Lynch and Friends Provident. When she returned to South Africa she joined linked investment services provider, TMA, which was later taken over by Edge Investments. In 2013, Monene joined Symmetry Multi-Manager as head of equity manager research. Symmetry merged with Acsis in 2013 to form Old Mutual Multi-Managers, and Monene became chief investment officer in 2018.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit newdigate.substack.com

Murray Winckler, co-founder & PM at Laurium Capital, was my special guest on the Investment Community podcast.

In this episode, Murray tells:

* How a background in investment banking (running capital raises and underwritings) gives Laurium an edge in event-driven investing.

* How a good investment team is differentiated by how well it does three things: business assessment, financial assessment, and valuation.

* How even fundamental, bottom-up stock pickers need to pay attention to the macro environment.

We also discussed:

* That in the early stages of Laurium’s life, they needed to manage their funds with an acute awareness that any investment accident could pose significant business risk.

* That to safeguard a firm’s culture, you need to be in control of three things: hiring, firing and bonus.

* That when hiring people, how smart they are is only a starting point.

Murray Winckler is a co-founder of Laurium Capital and a portfolio manager. After completing his articles at Deloitte, Murray began his investment career in 1989 as an industrial analyst at brokerage firm, Ivor Jones Roy, where he later became a partner. IJR was bought by Deutsche Bank in 1995, and Murray held various positions in Deutsche’s SA business, including Head of Research, Head of Global Markets, and ultimately CEO. In 2008, after a year’s sabbatical, Murray co-founded Laurium Capital.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit newdigate.substack.com

Rowan Williams-Short, head of fixed-income at Vunani Fund Managers, was my special guest on the Investment Community podcast.

In this episode (part 3 of 3), Rowan tells:

* How he finds the selective amnesia of fund managers to be nauseating. Too often they make claims of investment skill when an outcome is really due to luck.

* How the sell-side is incentivised to create an impression in the mind of the buy-side that the news is more urgent and important than it really is.

* How being humiliated, rather than merely humbled, can be a catalyst for investment enlightenment.

We also discussed:

* That when members of a team don’t fully buy into a shared investment philosophy, it is an invitation to investment accidents and interpersonal problems.

* That confidence should never be conflated with competence, especially in the asset management industry.

* That it’s disingenuous to claim that performance fees serve to align the interests of manager and client - these fees shift the risks to the client and the rewards to the manager.

Rowan Williams-Short is head of fixed-income at Vunani Fund Managers. He began his investment career in 1989 at Old Mutual as a fixed income and equity-derivatives analyst, and became a fixed-interest portfolio manager and head of derivatives. In 1994 he co-founded Prudential Portfolio Managers (SA), which is now M&G Investments. As CIO, he was responsible for all equity, fixed-income, and balanced funds. He joined African Harvest in 1999, where he was CIO and later CEO. In 2004 Rowan joined Nedgroup Investments in London as their global CIO. Then in 2007, he founded Orthogonal Investments, where he was CIO and responsible for all equity, fixed-income, balanced, and hedge funds. Orthogonal was taken over by Peregrine Quant, which later became Vunani Fund Managers.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit newdigate.substack.com

Rowan Williams-Short, head of fixed-income at Vunani Fund Managers, was my special guest on the Investment Community podcast.

In this episode (part 2 of 3), Rowan tells:

* How his investment performance improved when he stopped trying to be a hero, i.e. when he deliberately decided to not be quite so ambitious about his numbers.

* How making forecasts in financial markets is a perilous activity: you have to be both right and in the minority.

* How he found only 10% of the international hedge-fund managers that he interviewed to be “intriguing”. The rest were “desperately underwhelming” or worse.

We also discussed:

* That large investment teams do have the advantage of better coverage than small teams, but that is not necessarily helpful in generating better returns.

* That the CIO of a large team will tend to inadvertently rebuild their index in client portfolios, ironically because of a deficit in people skills.

* That hiring the right people for your investment team is the most important investment decision, requiring significant amounts of time and energy.

Rowan Williams-Short is head of fixed-income at Vunani Fund Managers. He began his investment career in 1989 at Old Mutual as a fixed income and equity-derivatives analyst, and became a fixed-interest portfolio manager and head of derivatives. In 1994 he co-founded Prudential Portfolio Managers (SA), which is now M&G Investments. As CIO, he was responsible for all equity, fixed-income, and balanced funds. He joined African Harvest in 1999, where he was CIO and later CEO. In 2004 Rowan joined Nedgroup Investments in London as their global CIO. Then in 2007, he founded Orthogonal Investments, where he was CIO and responsible for all equity, fixed-income, balanced, and hedge funds. Orthogonal was taken over by Peregrine Quant, which later became Vunani Fund Managers.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit newdigate.substack.com

Rowan Williams-Short, head of fixed-income at Vunani Fund Managers, was my special guest on the Investment Community podcast.

In this episode (part 1 of 3), Rowan tells:

* How he naturally understood probabilities as a kid playing board games with dice, and how his maths and stats training honed his ability to deal with more complex probability problems.

* How most market participants are unable to think probabilistically, and how that creates investment opportunities.

* How he developed deep respect for unknowns in the securities markets, and how that informs his philosophy of inference.

We also discussed:

* The folly of making point-forecasts of company earnings without including confidence intervals.

* That SA equity investors for the last decade have had to get only two big calls right: Naspers/Prosus and the platinum stocks.

* That investment excellence is undermined by a focus on asset-gathering, and that maintenance-research is a poor utilisation of expensive resources.

Rowan Williams-Short is head of fixed-income at Vunani Fund Managers. He began his investment career in 1989 at Old Mutual as a fixed income and equity-derivatives analyst, and became a fixed-interest portfolio manager and head of derivatives. In 1994 he co-founded Prudential Portfolio Managers (SA), which is now M&G Investments. As CIO, he was responsible for all equity, fixed-income, and balanced funds. He joined African Harvest in 1999, where he was CIO and later CEO. In 2004 Rowan joined Nedgroup Investments in London as their global CIO. Then in 2007, he founded Orthogonal Investments, where he was CIO and responsible for all equity, fixed-income, balanced, and hedge funds. Orthogonal was taken over by Peregrine Quant, which later became Vunani Fund Managers.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit newdigate.substack.com