It is a stifling hot day, but I have a table outside The Telegraph, imaginatively named after its location on Telegraph Street, just off Moorgate, writes Suzie Bliss. Safely stationed in the shade, I am cooling down from the Bank tube station oven when Andrew Summers, one foot on the pedal of his bike, freewheels towards me.
At first appearance, the head of fund research at Investec Wealth & Investment is the epitome of a cool customer, and literally exemplifies this when he gets his hands on a pint of soda with lashings of ice and fresh lime.
But I want to know what’s hot for Summers on the investment scene at the moment. Alongside infrastructure and absolute return, investment trusts look attractive.
‘A lot of the new asset classes that have developed in recent years lend themselves well to closed-ended formats, and we have taken advantage of that,’ he tells me, taking a few glugs of his drink.
‘The investment trust structure can help to smooth out income streams and generate more stable dividends for our clients. Investec Wealth & Investment has a lot of income clients, so investment trusts are really useful in this regard,’ he says.
Over the past four or five years they have invested hundreds of millions of pounds into alternative fixed income investment trusts, as well as alternative property investment trusts due to their income-producing characteristics.
Sifting through a menu home to the usual suspects of pies, burgers and wannabe ‘gastro’ dishes like quinoa salad and gnocchi, the process does not seem so dissimilar to picking investment trusts.
‘Despite the wide range of very attractive investment trusts, it is a bit of a minefield, and a lot of investment trusts are sub-scale,’ Summers explains. ‘With many investment trusts, you often might as well have an Oeic or a Sicav.’
He selects the chicken pie while I choose the beef Thai salad. As we wait for our food in the hot breeze (unsure as to whether it is an actual breeze or just the waft from the extractor fan) conversation turns to Summers’ role as a fund selector and how it has changed in the past 10 years, which he sums up in three points.
‘Firstly, the positive returns on government bonds continue evermore. When you think you can’t have another good year, you can. This has impacted my role from an asset allocation point of view.
‘Secondly, changes in the economic environment have meant we have to think even harder about where to look for yield and portfolio insurance,’ he says, echoing an industry-wide sentiment.
‘Finally, the impact on costs has re-emphasised the importance of fees, which is a good thing. When returns are good there is less emphasis on cost and the industry can get a bit blasé,’ he notes.
Our food arrives; the pie, as expected, looks like a pie whereas the salad is, in reality, a glorified stir-fry.
So while Summers’ role has changed, does this mean it has been made more difficult?
‘The hardest thing I face is planning ahead. You know what they say, “the best laid plans…” You can plan quarters ahead, but if a manager leaves or a new manager comes across the desk, plans are interrupted. You have to work hard to ensure you don’t always end up being reactive rather than proactive.’
Glass half full and glass half empty:
'The future of the British pub. Pubs will always be a part of British culture, and they have survived the (welcome) smoking ban, drink-driving campaigns and pressure from cut-price supermarket alcohol. And there are some great pubs in London. But rising rents, especially in London, are forcing pubs to change their ways, especially with the introduction of food, which has changed pubs in many ways. It’s hard nowadays to find a quiet boozer to have a pint on a Saturday night anywhere in Clapham!'
Would you like to meet us for lunch at your local pub? If so, email Suzie on firstname.lastname@example.org