Investment Community

Greg Hopkins, co-CIO of PSG Asset Management, was my special guest on the Investment Community podcast.In this episode:* The PSG team shops in uncrowded areas of the markets, those that are generally associated with fear and uncertainty. Difficult market conditions present the best investment opportunities and often represent a change in market leadership.* Their team-based decision-making process means that culture is even more important than it otherwise might be. Greg describes the team’s culture as low-ego, high-trust, active and open-minded.* The team is able to “hold the line” in the face of disconfirming data from the markets and negative feedback from stakeholders. This ability was tested and ultimately strengthened during a period of underperformance in 2019/2020. Greg Hopkins is co-CIO of PSG Asset Management and a fund manager on the firm’s global funds. He started his investment career in 1997 at Merrill Lynch Investment Managers in London (now BlackRock). He did short stints as an emerging market analyst and in the fixed income team, but for the majority of his 9 years at Merrill he was in the global value team, focusing on European equities. After a brief time as a hedge fund manager at Cambrian Capital, Greg returned to South Africa and a position at Sanlam Investment Management, where he spent 3 years working on their Best Ideas Fund. In 2010, he joined PSG Asset Management, and in 2012 became the firm’s CIO. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit newdigate.substack.com

John Biccard, PM at Ninety One, was my special guest on the Investment Community podcast.In this episode (part 2 of 2):* John explains the cyclicality in the relationship between growth and value stocks, and explains how prospective returns have changed during the era of free money.* He discusses how the valuation gap between growth and value has contracted recently, but still remains very extended.* He believes that bond and equity markets are pricing in a 2% US inflation rate but if it’s higher, growth stocks will take a disproportionate share of the pain.John Biccard is a portfolio manager at Ninety One, where he has responsibility for the firm’s Value Equity Strategy. He began his investment career in 1990 as an analyst at Simpson McKie Stockbrokers (which is now HSBC Securities), and later became head of financial and industrial research, as well as a director of the company. John then spent two years at HSBC Asset Management as a director of institutional asset management before he joined Ninety One (then Investec Asset Management) in 2000. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit newdigate.substack.com

John Biccard, PM at NinetyOne, was my special guest on the Investment Community podcast.In this episode (part 1 of 2), John tells:* That the extra returns you earn over time as a value manager are appropriate compensation for living a miserable life.* That his ideal investment idea is one that causes others to laugh with incredulity and question his sanity.* That it is sheer folly to assume that the market is right - it’s way better to do the work and reach an independent conclusion.John Biccard is a portfolio manager at Ninety One, where he has responsibility for the firm’s Value Equity Strategy. He began his investment career in 1990 as an analyst at Simpson McKie Stockbrokers (which is now HSBC Securities), and later became head of financial and industrial research, as well as a director of the company. John then spent two years at HSBC Asset Management as a director of institutional asset management before he joined Ninety One (then Investec Asset Management) in 2000. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit newdigate.substack.com

Richard Pitt, CEO and PM at BlueAlpha Investment Management, was my special guest on the Investment Community podcast.In this episode (part 2 of 2), Richard tells how:* Frequent trading is not a good way to invest, and it’s a terrible way to live.* Articulation of your investment approach is vital - allocators need to have a clear idea of what they’re buying because they’re building portfolios of exposures.* Ultimately your competitive advantage might boil down to: knowing who you are, investing in a way that’s consonant with who you are, and sticking to your approach through the tough times.Richard Pitt is CEO and portfolio manager at BlueAlpha Investment Management. He began his investment career in 1995 as an equity analyst at Old Mutual Asset Managers. After a short stint as a portfolio manager at Brait Asset Management, Richard became co-manager of Decillion Capital’s Big Rock hedge fund. He relocated to London with Decillion and co-managed their US/European hedge fund. He joined BlueAlpha in 2003 and his primary focus is global investing. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit newdigate.substack.com

Richard Pitt, CEO and PM at BlueAlpha Investment Management, was my special guest on the Investment Community podcast.In this episode (part 1 of 2), Richard tells:* How, as a rookie analyst in a bull market, his first recommendation was a sell. That company (Toco) eventually went bust.* What the consequences can be if you focus on performance and accolades rather than risk, especially when market conditions change.* How he is increasingly motivated by enabling people to grow, and that his ambition has shifted from making money to the upliftment and empowerment of others.Richard Pitt is CEO and portfolio manager at BlueAlpha Investment Management. He began his investment career in 1995 as an equity analyst at Old Mutual Asset Managers. After a short stint as a portfolio manager at Brait Asset Management, Richard became co-manager of Decillion Capital’s Big Rock hedge fund. He relocated to London with Decillion and co-managed their US/European hedge fund. He joined BlueAlpha in 2003 and his primary focus is global investing. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit newdigate.substack.com

Monene Watson, CIO of Old Mutual Multi-Managers, was my special guest on the Investment Community podcast.In this episode, Monene tells:* How difficult it is to assess whether underperformance by a fund manager is due to a broken process (in which case the manager should be terminated), or if it’s due to a temporary shift in market dynamics (in which case the manager should be given time).* How she respects fund managers who are self-reflective and have the ability to admit their mistakes.* How the focus has shifted from identifying star fund managers to identifying investment teams with great cultures.We also discussed:* That her advice to fund managers is that they should make it easy for investors to understand that the managers know what they’re doing. They should have clarity about their edge and be able to articulate that edge.* That there’s a big difference between assessing other investors and yourself being accountable to clients for your investment decisions.* That it’s important to distinguish between feelings and valuations, and it’s important to understand both yourself and markets.Monene Watson is CIO of Old Mutual Multi-Managers. She began her career in the 1990s as a performance analyst at Old Mutual Asset Management. She then went to London and worked at Merrill Lynch and Friends Provident. When she returned to South Africa she joined linked investment services provider, TMA, which was later taken over by Edge Investments. In 2013, Monene joined Symmetry Multi-Manager as head of equity manager research. Symmetry merged with Acsis in 2013 to form Old Mutual Multi-Managers, and Monene became chief investment officer in 2018. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit newdigate.substack.com

Murray Winckler, co-founder & PM at Laurium Capital, was my special guest on the Investment Community podcast.In this episode, Murray tells:* How a background in investment banking (running capital raises and underwritings) gives Laurium an edge in event-driven investing.* How a good investment team is differentiated by how well it does three things: business assessment, financial assessment, and valuation.* How even fundamental, bottom-up stock pickers need to pay attention to the macro environment.We also discussed:* That in the early stages of Laurium’s life, they needed to manage their funds with an acute awareness that any investment accident could pose significant business risk.* That to safeguard a firm’s culture, you need to be in control of three things: hiring, firing and bonus.* That when hiring people, how smart they are is only a starting point.Murray Winckler is a co-founder of Laurium Capital and a portfolio manager. After completing his articles at Deloitte, Murray began his investment career in 1989 as an industrial analyst at brokerage firm, Ivor Jones Roy, where he later became a partner. IJR was bought by Deutsche Bank in 1995, and Murray held various positions in Deutsche’s SA business, including Head of Research, Head of Global Markets, and ultimately CEO. In 2008, after a year’s sabbatical, Murray co-founded Laurium Capital. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit newdigate.substack.com

Rowan Williams-Short, head of fixed-income at Vunani Fund Managers, was my special guest on the Investment Community podcast.In this episode (part 3 of 3), Rowan tells:* How he finds the selective amnesia of fund managers to be nauseating. Too often they make claims of investment skill when an outcome is really due to luck.* How the sell-side is incentivised to create an impression in the mind of the buy-side that the news is more urgent and important than it really is.* How being humiliated, rather than merely humbled, can be a catalyst for investment enlightenment.We also discussed:* That when members of a team don’t fully buy into a shared investment philosophy, it is an invitation to investment accidents and interpersonal problems.* That confidence should never be conflated with competence, especially in the asset management industry.* That it’s disingenuous to claim that performance fees serve to align the interests of manager and client - these fees shift the risks to the client and the rewards to the manager.Rowan Williams-Short is head of fixed-income at Vunani Fund Managers. He began his investment career in 1989 at Old Mutual as a fixed income and equity-derivatives analyst, and became a fixed-interest portfolio manager and head of derivatives. In 1994 he co-founded Prudential Portfolio Managers (SA), which is now M&G Investments. As CIO, he was responsible for all equity, fixed-income, and balanced funds. He joined African Harvest in 1999, where he was CIO and later CEO. In 2004 Rowan joined Nedgroup Investments in London as their global CIO. Then in 2007, he founded Orthogonal Investments, where he was CIO and responsible for all equity, fixed-income, balanced, and hedge funds. Orthogonal was taken over by Peregrine Quant, which later became Vunani Fund Managers. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit newdigate.substack.com

Rowan Williams-Short, head of fixed-income at Vunani Fund Managers, was my special guest on the Investment Community podcast.In this episode (part 2 of 3), Rowan tells:* How his investment performance improved when he stopped trying to be a hero, i.e. when he deliberately decided to not be quite so ambitious about his numbers.* How making forecasts in financial markets is a perilous activity: you have to be both right and in the minority.* How he found only 10% of the international hedge-fund managers that he interviewed to be “intriguing”. The rest were “desperately underwhelming” or worse.We also discussed:* That large investment teams do have the advantage of better coverage than small teams, but that is not necessarily helpful in generating better returns.* That the CIO of a large team will tend to inadvertently rebuild their index in client portfolios, ironically because of a deficit in people skills.* That hiring the right people for your investment team is the most important investment decision, requiring significant amounts of time and energy.Rowan Williams-Short is head of fixed-income at Vunani Fund Managers. He began his investment career in 1989 at Old Mutual as a fixed income and equity-derivatives analyst, and became a fixed-interest portfolio manager and head of derivatives. In 1994 he co-founded Prudential Portfolio Managers (SA), which is now M&G Investments. As CIO, he was responsible for all equity, fixed-income, and balanced funds. He joined African Harvest in 1999, where he was CIO and later CEO. In 2004 Rowan joined Nedgroup Investments in London as their global CIO. Then in 2007, he founded Orthogonal Investments, where he was CIO and responsible for all equity, fixed-income, balanced, and hedge funds. Orthogonal was taken over by Peregrine Quant, which later became Vunani Fund Managers. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit newdigate.substack.com

Rowan Williams-Short, head of fixed-income at Vunani Fund Managers, was my special guest on the Investment Community podcast.In this episode (part 1 of 3), Rowan tells:* How he naturally understood probabilities as a kid playing board games with dice, and how his maths and stats training honed his ability to deal with more complex probability problems.* How most market participants are unable to think probabilistically, and how that creates investment opportunities.* How he developed deep respect for unknowns in the securities markets, and how that informs his philosophy of inference.We also discussed:* The folly of making point-forecasts of company earnings without including confidence intervals.* That SA equity investors for the last decade have had to get only two big calls right: Naspers/Prosus and the platinum stocks.* That investment excellence is undermined by a focus on asset-gathering, and that maintenance-research is a poor utilisation of expensive resources.Rowan Williams-Short is head of fixed-income at Vunani Fund Managers. He began his investment career in 1989 at Old Mutual as a fixed income and equity-derivatives analyst, and became a fixed-interest portfolio manager and head of derivatives. In 1994 he co-founded Prudential Portfolio Managers (SA), which is now M&G Investments. As CIO, he was responsible for all equity, fixed-income, and balanced funds. He joined African Harvest in 1999, where he was CIO and later CEO. In 2004 Rowan joined Nedgroup Investments in London as their global CIO. Then in 2007, he founded Orthogonal Investments, where he was CIO and responsible for all equity, fixed-income, balanced, and hedge funds. Orthogonal was taken over by Peregrine Quant, which later became Vunani Fund Managers. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit newdigate.substack.com

Deon Gouws, CIO of Credo, was my special guest on the Investment Community podcast.In this episode, Deon tells:* How the most formative experience of his career came from being “technically bankrupt” for a few weeks, due to having a long and geared position in a single stock that tanked as interest rates rose sharply.* How being a good CIO means having to be skilled at both investment management and people management.* How he learned to wear his own opinions lightly (“don’t believe your own b******t”).We also discussed:* That many different investment approaches can work, as long as the manager has a demonstrable process and sticks to that process through the cycle.* That the key attributes of an excellent investor are intellectual honesty and emotional stability.* The importance of focussing on our strengths rather than weaknesses, because that’s how we have a shot at being exceptional.Deon Gouws is CIO of Credo, an independent wealth management business headquartered in London. Deon began his investment career as an analyst at Old Mutual Asset Management. He left to join Capital Alliance as head of industrials before rejoining Old Mutual as head of research. Deon then spent five years in London as CIO of Sanlam Multi-Managers before returning to South Africa to join RMB Asset Management, first as CIO and then CEO. He then returned to London in 2012 to take up his current position as CIO of Credo. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit newdigate.substack.com

Sean Peche, PM and founder of Ranmore Fund Management, was my special guest on the Investment Community podcast.In this episode, Sean tells:* Why it’s important to be careful about stock stories. The stock price changes long before the story does, and by the time the story changes, you’ve lost your money.* How value managers are just as prone as growth managers to falling prey to false narratives about stocks and markets.* How there’s a lack of evidence that larger investment teams deliver better investment performance than smaller teams.We also discussed:* The challenge for active managers to convince their clients that their management fee is good value compared to the fees charged by passives.* Whether performance fees incentivise fund managers to perform better, or whether these fees simply induce them to take more risk.* The possibility of a backlash against performance fees, and especially against fund managers’ attempts to reset their high water marks.Sean Peche is PM and founder of Ranmore Fund Management. Sean’s investment career began in South Africa in 1997 when he joined Old Mutual Asset Management as an equity analyst. In 1999 he joined Decillion Capital as one of its founding members and co-managed their successful BigRock Fund, a South African-based hedge fund. In 2001 he relocated to London with Decillion Fund Management and co-managed a US/European hedge fund. In 2003 he joined London-based Orbis Investment Advisory, before leaving in 2008 to establish Ranmore Fund Management. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit newdigate.substack.com

Khaya Gobodo, MD of Old Mutual Investments, was my special guest on the Investment Community podcast. The recording-quality of the more important end of the conversation is unfortunately quite poor. I hope you’ll find that the exceptional quality of Khaya’s engagement more than compensates for my technical deficiencies.In this episode Khaya tells:* How it feels to get a call at 11pm from a government minister when your organisation pulls a credit line to a state-owned enterprise.* How easily conflicts of interest are resolved if you always act in the best interests of your clients.* How he sees his role at Old Mutual as the curator of an investment ecosystem that comprises five independent units, each with its own unique culture.We also discussed:* The challenges of addressing, in an equitable way, the ever-pressing problems of racism, sexism and ageism.* The problems that arise when skilled investment professionals are promoted into leadership positions without having developed the necessary soft skills.* The probability that more than half of SA’s investment firms will not survive.Khaya Gobodo is MD of Old Mutual Investments, where he oversees both the listed and unlisted asset management businesses of Old Mutual. He began his investment career in 1999 at Investec Asset Management (now renamed Ninety-One), before leaving to co-found Afena Capital in 2005, where he acted as CIO. Khaya returned to Investec for a 3-year stint as director and strategy leader, before taking up his current position at Old Mutual. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit newdigate.substack.com

In this episode Charles tells:* How he took advantage of his big break to change the arc of his career.* How he balances logical analysis with intuition.* How the best way to get rich is … slowly.We also discussed:* The degree to which perfectionists struggle as portfolio managers.* The importance of culture, and cultural fit, in investment teams.* The probability of failure of smaller asset management firms in SA.Charles De Kock is co-head of absolute return funds at Coronation Fund Managers. He started his working life as a lecturer in economics at the University of Pretoria. After 7 years he joined the investment division of Old Mutual, where he ultimately became chief investment officer. After 19 years at Old Mutual he joined Coronation, and he’s been there for the past 17 years. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit newdigate.substack.com

In this episode (the second of two) Dave tells:* How to finish first, first you must finish* How being right can be uncomfortable * How important it is to know yourself.We also discussed:* How crypto is a con that works if everybody believes, and how that is also true for gold and fiat currency* How negative real interest rates means we no longer have a yardstick of risk-free return, but rather return-free risk* How regulation is a massive tax on the investment industry, which delivers no safety benefit for the end-investors.Dave Foord is CIO of Foord Asset Management, a firm he founded in 1981. He began his investment career in the late 1970s with a three-year stint as an industrial analyst at Old Mutual. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit newdigate.substack.com

In this episode (the first of two) Dave tells:* How the highlight of his career is to have survived in the industry for 40+ years* How it felt to be seen as an idiot for not loading up on tech stocks on the DotCom Bubble* How he still tap-dances to work every day.We also discussed:* How the decision to turn down money had the effect of turning the gatekeepers against him* How most people are not good investors because they don’t properly understand probability and time* How investment people are prima donnas, and too many of them together is a recipe for chaos.Dave Foord is CIO of Foord Asset Management, a firm he founded in 1981. He began his investment career in the late 1970s with a three-year stint as an industrial analyst at Old Mutual. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit newdigate.substack.com

Rob tells:* How feeling helpless in the wake of 9/11 enabled him to strip away illusions of control* How market conditions change but the human psyche does not* How attacking an analyst is not the same as interrogating an investment thesis.We also discussed:* How the green economy is attracting real capex, and is an investable phenomenon* How tough it is to manage money and manage an investment firm at the same time* How an ability to listen well is characteristic of excellent investment teams.Rob Oellermann is a portfolio manager at Laurium Capital, and is responsible for the firm’s global equity offering. Prior to this he was CIO of Tantalum Capital, a firm that he co-founded, and which was later merged with Laurium.Before starting Tantalum, Rob was both a fund manager and head of research at Coronation Fund Managers. He started his investment career in 1994 as an analyst at Allan Gray. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit newdigate.substack.com

Delphine tells:* How gender and race are proudly part of her identity, but they don’t define her* How meritocracy is not compromised when you pursue diversity* How much hypocrisy surrounds ESG investing.We also discussed:* How the job of an analyst is changing dramatically* How easy it is to confuse confidence and conviction and competence* How having the wrong owners can destroy an investment firm.Delphine Govender is co-owner and CIO of Perpetua Investment Managers, a firm she founded in 2012. She started her investment career as an analyst at Old Mutual Asset Managers, after she’d completed her articles at Deloitte. She later moved on to Allan Gray for 11 years where she became executive director and portfolio manager, before founding Perpetua. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit newdigate.substack.com

Anet and I had a wide-ranging conversation that I found fascinating. Some surprising moments:* How it felt for her to be mistaken for the tea-lady* How repositioning a portfolio can feel like swapping children* How important empathy is for investment professionals.We also discussed:* How to change the trajectory of your career* How to develop a psychological edge* How to create a winning culture.Anet Ahern is CEO of PSG Asset Management, a position she has held since 2013. She started her investment career in 1986 at Allan Gray, after which she became a fund manager at Syfrets Managed Assets. She later moved on to be CIO and CEO of BOE Asset Management, and then became CEO of Sanlam Multi Manager International, before taking on her current role at PSG. Anet is the longest-standing female CFA charterholder in South Africa. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit newdigate.substack.com

Newdigate Insights is getting an upgrade. I’m adding a podcast to the existing newsletter.To keep things clear and simple, I’ve created two sections in Newdigate Insights:* In My Opinion. This is the existing newsletter, which is a series of articles to help investment professionals get better at dealing with the soft issues of investment management.* Investment Community. This is the forthcoming podcast, which is a series of conversations with the most insightful players in the financial markets ecosystem. It’s a podcast for investment professionals.Investment CommunityIn the podcast I’ll be in conversation with: * The most experienced fund managers and analysts* The CEOs and CIOs of investment firms* The asset consultants who evaluate those managers and firms* The multi-managers who allocate to them.Most of the conversations will be about life in the public markets. And I’ll also be in conversation with players who operate in the private markets, and with entrepreneurs who have taken their private companies public. Each of these different members of the investment community has a unique perspective on the financial markets.As a subscriber you will receive both the newsletter and the podcast directly into your email inbox as they are published. If you’ve not yet subscribed, please do. It’ll make a difference to the results that you achieve. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit newdigate.substack.com