Threadneedle head of UK equities Simon Brazier has warned against the perils of letting a political agenda prevent Royal Mail chief Moya Greene from driving further change in the business.
‘I want to make sure the political agenda does not mean she is constrained in her ability to bring about the change she wants to do in that business, but also she is not lured away.’
As the largest long-only investor in Royal Mail – holding 3% of equity – Brazier is particularly keen that Greene is remunerated appropriately.
‘There is only one other chief executive in the FTSE 100 who gets paid less than her,’ he said. ‘We are not here to pay money to people for no reason but she has demonstrated that she is a significant asset to the business, so we want to make sure the political agenda is not “let’s beat up Moya Greene”.’
Having held the stock since its IPO last year, Brazier said Threadneedle is taking a long-term view and will look to buy more if the share price falls.
Although the price has risen hard, he said: ‘We are not investing on a three-month view but on a five-year view. There is a significant amount that Moya Greene can do.’
Royal Mail fits into the fund’s ‘strong franchises and unique assets’ category, which alongside ‘defensive growth’ currently comprises 75% of the portfolio.
Likewise, Brazier is positive on AstraZeneca, which he views as trading on a more attractive valuation than many cyclical names.
During the second half of 2013, he has continued to reduce the fund’s underweight in mining, where he looks for self-help so the company isn’t reliant on commodities prices, management change and cost-cutting measures. First Quantum Minerals, Glencore Xstrata and Rio Tinto feature as holdings in the sector.
Over the three years to the end of January, Brazier has posted a 36.46% return versus a FTSE All Share return of 27.65%.