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Investment Trust Insider: Why there may be no point meeting managers
by James Carthew on Feb 05, 2013 at 00:01
With apologies to the anyone reading this who was there, this article draws on the presentations made at this year’s Winterflood Investment Trusts Annual Conference. There was a good range of speakers, including managers of a number of trusts I own and one I was inspired to buy – more of that later.
It is always fascinating to me how successful managers can have quite contrasting views on the ‘right’ way to manage money.
One point made by Alastair Mundy, manager of Temple Bar , was that he placed no value on meeting company management on the basis that they are all generally practised in the art of charming investors (so they are never likely to give you a balanced view on the prospects for their company) and they cannot tell you anything that they have not already told everyone else.
It is a fair point, sounds rational and not meeting management has not affected his investment returns as far as we can see. Temple Bar is the second best performing UK Growth & Income fund over the past five years (behind Finsbury Growth & Income ) in net asset value (NAV) terms, beating the UK market by 44%.
By contrast, the next speaker, Paul Atkinson, manager of North American Income Trust (NAIT) for Aberdeen, placed great emphasis on meeting management saying ‘we see ourselves as partners’ with companies (considering that, his presentation was a little heavy on the macro backdrop and light on the reasons behind his individual stock selection).
Aberdeen’s investment style is supposed to be consistent across all of its equity funds, regardless of geography, and a punishing schedule of company meetings and an emphasis on quality of company management are integral to that.
Alexander Darwall, manager of Jupiter European Opportunities , also spends a lot of time meeting management – he had just come back from two days of company meetings in Germany. He said meetings with company management were the best source of information available to investment managers both on their companies and the companies they deal with and are in competition with (he almost never speaks to sell-side analysts).
He places considerable emphasis on identifying open, honest and accountable management when selecting stocks (while weeding out those he believes are self-deluding).
Finally, Shumin Huang, the manager of JP Morgan Chinese , said she relied on the contact JP Morgan’s locally based teams of analysts – 25 in Shanghai alone – have with companies.
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