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Lunch with Ashcourt Rowan’s Stephen Walker

Lunch with Ashcourt Rowan’s Stephen Walker

The nature of this column dictates that my interviewee chooses the restaurant, reports Anna Dumas. So far this has resulted in everything from Nando’s (also a personal favourite) to a Michelin-starred fish restaurant. But this week’s lunch companion pulled out a trump card. Ashcourt Rowan’s Stephen Walker and I had the pleasure of lunching at Hawksmoor Guildhall.

Walker – as well as having impeccable taste – also possesses an impressive job title. As Ashcourt Rowan’s head of equities research and market strategy, he is charged with everything from running AIM portfolios to leading the firm’s overall research process.

Not one to baulk at a bit of extra work, he also finds time to meet and assess fund managers, write the company’s monthly News and Views publications and construct the odd model portfolio, among other things.

This is why when Citywire Deutschland researcher Elisa Morettini asked me for an insight into the UK wealth management industry, I could think of no meeting more appropriate.

The three of us wasted no time in ordering. Stephen is a regular and I had researched the menu beforehand. Elisa and I shared the surf and turf while he opted for the fillet steak. As we eagerly awaited the arrival of more than half a kilo of prime British beef and half a lobster, we talked about when Walker first discovered stocks. If his comprehensive workload didn’t impress you, then perhaps this will; he was nine years old.

‘I bought shares in HTV,’ he told me. ‘I used to read the financial pages of all the papers my parents bought. They weren’t really interested in that stuff but I was hooked.

‘I remember a couple of years later in year seven, we were given free rein to design a project for ourselves. I can’t remember what sort of things the others did but I looked at the relationship between price-to-earnings ratios and dividend yields. It might sound precocious, but I’ve never been able to understand people who say they don’t know what they want to do with their lives.’

Indeed after what he describes as a ‘brief flirtation’ with being an actuary, Walker set his heart on investments, an ambition that led him directly to Ashcourt Rowan in 2001, fresh from a degree in economics and a masters in finance at Exeter.

Cracking open a lobster claw, I asked if he were able to pick out a particular highlight of the 13 and a half years he has been at the firm.

There was no hesitation.

‘Meeting Warren Buffett in 2008,’ he said, beaming. ‘His approach is so clear. He says that you should know within five minutes of looking at a stock whether or not you want to buy it. It might take me longer than it does the world’s most famous investor, but the ethos is the same. You have to be an empiricist.’

As we polished off the last of our mains, we got on to discussing his macro stance on the investible universe. While he explained that in general he feels it is ‘best to avoid sweeping statements about the performance of one country over another’, he does feel bullish on the long-term prospects for the US;

‘People perennially underestimate the US. It’s the most shareholder-friendly country in the world, and the state doesn’t prop up zombie companies to the same extent that the UK does.

‘The business environment is that much tougher, and therefore that much more interesting as an investment case.’

While some might see it as a fairly steep jump from overseeing global macro strategy to constructing AIM portfolios, Walker claims that equity know-how is the backbone of most of his research, and helps in particular when it comes to his role within the firm's manager selection process.

‘When I meet a manager, I know exactly what their holdings are beforehand,’ he said. ‘I know how they have performed and I have a view as to how they should perform in the near future.

‘Often you find that pure fund analysis can be quite a backward looking exercise as you’ll be chasing past performance, that’s where equity expertise gives you the edge, it’s a much more predictive discipline, and you have to be forward looking.”

As two glorious puddings (and an espresso for our Continental guest) arrived, I noticed Matt Hudson from Schroders sitting a few tables away and couldn’t help but think that any fund manager meeting this investor would certainly have his work cut out.

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