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Pub Club: At The Cask & Glass with PortfolioMetrix

Pub Club: At The Cask & Glass with PortfolioMetrix

Tucked into a street corner a few moments away from bustling Victoria Station sits The Cask & Glass, a strong contender for our unofficial Smallest Pub award, writes Eleanor Mahmoud. This pub may be small on space, but it makes up for its size with charm and tradition.

Choosing one of the few tables at the pub that can seat three, I meet Nic Spicer and Mike Roberts from PortfolioMetrix – a firm which, despite choosing this tiny venue, is positively growing in size itself.

Launched in 2010, PortfolioMetrix describes itself as offering ‘discretionary investment management for the 21st century’. As we get comfortable with our drinks, Roberts, managing director and head of innovation, explains how this came about.

‘In the last 30-40 years, bespoke portfolios were the norm and model portfolios were starting to appear. Over time, reality meant that model portfolios were solving a lot of problems for advisers and DFMs, especially surrounding scalability, so their popularity grew,’ he says.

‘PortfolioMetrix decided that it should be possible for every portfolio to be created on a bespoke basis and the way to solve the scalability problem was through technology.’

Extensive use of technology is a central part of the firm’s business model and something that sets it apart. With eight people out of a team of 35 working solely as developers on Wealth Explorer, the software they have built and run themselves, there is no shortage of expertise.

‘Human error can be unreliable at times, but software allows for consistency,’ Roberts says. 

Specialising in asset allocation, fund selection and rebalancing, the company works directly with financial advisers with an aim to deliver better outcomes for the end client. Currently the business provides 50 advisers, but the duo are expecting this to double soon.

Spicer and Roberts both admit that one of the main challenges they faced when launching their proposition was finding the right advisers to work with.

‘We’re extremely lucky to have found the advisers we did in 2012, who were genuinely interested in our proposition and have now become our greatest advocates.’

Talking tech is somewhat more complicated than the brief menu we are about to choose from, which is made up entirely of five variations of toasted cheese sandwiches. Unsurprisingly, our sandwich decisions do not take very long and we get our orders in at the bar.

I’m interested to hear how PortfolioMetrix’s investment approach measures up to its approach to technology. Spicer, portfolio manager and UK head of research, explains that they invest their own money in the firm’s core approach.

‘It’s where we collate all our best fund ideas in one place. It’s not the same as a specific “balanced” fund or model, rather it’s an approach that uses the same funds in varying quantities to span the entire risk spectrum, with equities funds having higher weights at higher risk levels.’

As talk turns to current asset allocation, it seems that Spicer has a refreshingly positive fixed income outlook.

‘Fixed income certainly has a role in portfolios,’ he says. ‘At the moment we like credit more than developed market sovereign bonds. If interest rates follow a predictable pattern of rises, then fixed income will be fine.

‘We are on the lookout for the surprises though, that’s what will shake things up.’

Looking to shake up the industry, PortfolioMetrix has a demanding year ahead. Coordinating teams across the UK, Ireland and South Africa, it is launching an updated cash flow modelling system in 2018 as well as celebrating the five-year anniversary of its portfolios in January.

‘We’ve been testing our methodology over the last seven years and we can see that our theories work well in practice,’ Roberts concludes. ‘There’s been no shortage of time, activity and hard work that’s gone into it.’

Glass half full: 'Global growth finally seems to be on a steadier footing after looking somewhat wobbly for most of the period post crisis.'

Glass half empty: 'Unpredictable leaders in the form of Donald Trump and Kim Jong-un have raised the risk of a conflict, which would have catastrophic consequences if it did occur.'

Email me on emahmoud@citywire.co.uk if you'd like to go for lunch and take part in our Pub Club feature. 

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