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My first ever investment: 15 wealth and fund managers reveal all
by Elsa Buchanan on Sep 11, 2013 at 13:49
In the first of a two part series, we uncover the investments our readers made when they were still wet behind the ears, with golf clubs, rare books and jewellery among the items featured.
Michael Lally, director at Thesis Asset Management
The first ever shares I bought for myself, I think in 1970, were in a company called Sea Diamond which dredged for diamonds off the West coast of Africa. The company had nothing to do with the recently ill-fated cruise ship of the same name, although the shares sunk just as quickly.
Alan Steel, founder, Alan Steel Asset Management
When I started the business in 1975 (I was only 28 at the time) I set a basic income of £400 a month and decided from day one to put 25% in monthly pension. That was my first investment. It was a box standard with profit one and it formed the basis of long term planning. Years later I swapped it for a unit linked equity one and I caught the bull market of the mid-1980s.
Peter Botham, chief investment officer, Brown Shipley
I have no difficulty in recalling my earliest investments. The first time I invested money, when employed as a graduate trainee, was into an automotive components company that I had been researching, namely Armstrong Equipment.
Having invested my meagre savings in late 1984, six months later I had made almost 50% and so decided to sell and reinvest into Weir Group, which were then priced at 42p. Doubtless if I was Warren Buffet I’d still be holding them today at 2200p, but by late 1985 another 50% profit seemed too good to turn down.
I recall at the time making various calculations that showed at this rate I would be happily retired by the age of 50. The reality is that I am now approaching 53 and nowhere near retirement.
Paul Kavanagh, partner and senior market strategist, Killik & Co
One of my first investments was in a small quoted company called Norman Hay plc. Driving from Heathrow one day, I spotted its industrial site on the A4. Pulling out the Extel card, I found out its seven acre site was still valued at 1938 levels, but was easily worth twice the market capitalisation at the time. The business was in surface coatings, which was a little uninspiring and hardly profitable at the time, but they had no debt and what I believed to be a lot of hidden value.
This was later picked up by Roger Seelig, a corporate financier with Morgan Grenfell who had worked on the Guinness takeover. He bought a stake, clearly with a view to joining the board and building the business up. The shares trebled virtually overnight. With the advent of online computer analysis, it is harder to spot these anomalies now, but small companies remain very under researched, so still worth keeping a close watch!
Nicholas Williams, Citywire AA-rated manager of the Baring Europe Select Trust, Baring Asset Management
My first investment as a fund manager in 1993 was Freya Marabou, a Norwegian chocolate company. Within weeks of the investment, the company received a take-over offer at a large premium, and, since that heady experience I have remained a European smaller companies manager.
My first investment for my own purposes, in 1984 when I was 18, was much less good: buying cheap jewellery in Asia to sell in the UK. I'm not in import-export, but if anyone wants some bangles…
James Von Simson, portfolio manager, Thurleigh
My first ever investment was a copy of Red Shark by Ralph Steadman that bought when I was at university on the back of reading Fear and Loathing in Las Vegas one too many times. I knew nothing of rare books or illustrations but my version had a hand drawn self-portrait by Kurt Vonnegut in the front so I figured it must be a little special.
I believe it cost me $120 back in 2003 and then I sold it back to the bookseller in 2006 for $850. Annoyingly, I now see it’s valued at $1,500 so, much like ASOS, I multiplied my investment many times over and still got out way too early…
Robert A. Bill, senior investment manager at AMR Financial Management
My first investment was in Jaguar Cars plc in 1988 - I bought the shares purely because I loved the cars! A little while later, Jaguar was taken over by Ford and I made a good profit, but I was sad that the company had fallen into American hands.
James Butterfill, director and global equity strategist at Coutts
My first personal investment was in Apple shares, having purchased them at $52 a share in 2006 with a full belief that the upcoming entrance in to the mobile phone market, as indicated in a release of iTunes, would translate into a significant revenue boost for the company.
My one error was selling them in 2007 for $157 a share to fund my wife's engagement ring, or was it an error? You can’t put a price on a good marriage, but I jokingly like to remind my wife from time to time how much money we could have made. I suppose one never enters a marriage thinking it is a money saving exercise!
StJohn Gardner, head of investment management at Arbuthnot Latham & Co
My first ever investment was suggested to me by a school friend who was involved in equity placement. A ship propeller manufacturer had developed a laser technology to ensure perfect smoothness (as a tiny imperfection can cause significant juddering) and realised the precision technology had many other applications and had decided to float the business. I bought Robotic Technology Systems, probably in the mid-1990s, and it quickly doubled such that I sold it to fund my MBA in 1996.
Paul Stevens, fund manager on the Smaller Companies team at Octopus Investments
I made my most substantial [first] investment into a set of golf clubs. After early signs of promise, I would now describe the performance as ‘woefully mediocre’ with occasional moments of excitement. Despite its unpredictability, heavy seasonal bias and vulnerability to erratic investor behaviour, I remain a holder.
Nick Wilson, chairman of London-listed Investment Company, Qatar Investment Fund
My first investment was Occidental Petroleum, in 1968, which was drilling in Libya next to Mobil Oil - where I was based. Soon after Occidental went into Libya in 1966, on exploration concessions handed back by Mobil and others, Occidental was producing fifteen thousand barrels per day and in 1967 discovered a new oil field. By 1970 Occidental was vying with Esso to be the second largest exporter of oil from Libya. My investment did well, and crucially I sold the stake before Libya’s oil fields were nationalized when 27-year-old Muammar Gaddafi staged a coup d'état that unseated King Idris.
Xavier Lagrandie, Manager of Lombard Odier’s Eurozone small and mid-caps fund
My first investment as a professional portfolio manager was into an American biotech company. My boss at that time asked me to meet a 'star' analyst of some US brokerage firm who was highly-ranked and highly-appreciated by his salesman, who in turn was highly-regarded by my boss as one of the best in the industry. So I met this star thinking that they must all know something I didn’t. This biotech stock (I forgot the name) had collapsed by 50% and the star analyst, wearing an expensive suit, expensive shoes and a big golden watch, convinced me that it was the opportunity of a lifetime.
So I bought the stock and within 15 days the stock collapsed another 50%. When I told my story to a wise old portfolio manager at my bank, he replied: ‘A star is something that still shines but has been dead for a long time.A good lesson which led me, a few years later, to become the boss of my then boss.
Regina G Borromeo, portfolio manager at Brandywine Global Investment Management
When I think about investing personally, I think about having enough cash and liquidity to do so. Growing up in the developing world, cash is king, but also as important is having the right currency denomination! And I first made that first step at the age of 5, when I started saving all the pesos from birthdays and Christmas gifts in my piggy bank and then, asking my mum to convert it into US dollars.
Eventually, by the time I went to boarding school in the US, I had enough US dollars to open up a 5-year Certificate of Deposit (CD) that paid 5.5% rate. This cash was part of my deposit in a 1-bedroom flat, which has appreciated since purchase. Not the most exciting story, but definitely quite stress-free.
Andrew Paterson, business development manager, UK discretionary, Aberdeen Asset Management
I spent the summer of 2010 at Aberdeen as an intern and was then accepted to join the company’s graduate scheme. The equity investment process employed by all of Aberdeen’s investment desks has its roots in Asia and was developed by Hugh Young and others way back in the 1990s when I was still in short trousers!
Given the high regard Hugh and team are held in by both clients and colleagues it is not that surprising that my first investment was in a fund they run. I invested in the Aberdeen Global – Asian Smaller Companies fund in October 2010 and complemented this holding with our Aberdeen Global – Emerging Market Smaller Companies fund run by the Global Emerging Markets team, led by Devan Kaloo.
I wish I could say that I chose to focus on small caps due to the inherent strengths of Aberdeen’s bottom up process to uncover hidden ‘GEMs’ in the small cap space, the reality is that I naively looked at past performance and took little regard for the risks.
Fortunately it’s worked out fine and the funds have returned 13% & 18% since I invested, albeit the numbers would have been better but for the past couple of months. I’m happy though as it’s a long time until I retire.
David Kirkby, investment director, Investec Wealth & Investment
My first ever investment was in BT. In 2001, knowing I wanted to be an investment manager in the last year of university, my Gran gave me some money for my 21st birthday to buy a share I thought would make 'lots of money'! I was in the middle of completing my dissertation in which I was focusing on the efficiency of BT’s share price, so naturally at the time, this seemed a good choice...
Little did I know that in the succeeding months I would have to spend my university food money on supporting a rights issue and then seeing my investment almost halve during the ‘tech boom’! Alas, I still own the shares for posterity and can now claim I am back to break even. Although it wasn’t the best investment I have ever made, the dividend now amounts to just about enough to buy me a ‘free’ pint every year!