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A Decade of Investing Excellence
James Anderson - Baillie Gifford
Scottish fund manager Baillie Gifford is not known for rapid staff turnover, and Anderson has been with the firm since 1983 and a partner since 1987. After heading up European equities until 2003, he founded the firm’s Long Term Global Growth strategy; this fund has made 9.8% a year gross of fees, on average and in sterling terms, during the 10 years to May 31 2016, against 7% for its benchmark, the MSCI All Countries World index. That performance puts it 9th out of 260 funds in the global equity sector, and most of the few to have done better are sector-specialist healthcare funds. The £4 billion Scottish Mortgage Investment Trust, which he co-manages, made 13% a year on average over the 10 years to the end of May, against 7.7% for the benchmark, and has an active share of 95%. It is the second-best performer in its sector. Anderson, known for a smart series of bets in the 2000s on emerging markets stocks and, perhaps even smarter, selling out of them around 10 years later, is now backing technological disruption as his next big theme. He knows his way around Silicon Valley and thinks the unparalleled global reach of internet giants like Apple and Amazon more than justifies their enormous market value. He became chairman of Baillie Gifford’s equity improvement group in 2015 and helped to lobby for and set up the Investor Forum, a corporate-governance network for fund managers that was recommended in the Kay Review and lauched in 2014.
Alexander Darwall - Jupiter Asset Management
Darwall, who has been with Jupiter since 1995, is head of strategy for the firm’s European growth funds and manager of the Jupiter European Fund and Jupiter European Opportunities Trust. Including institutional mandates, he runs £7.1 billion in all, almost one fifth of Jupiter’s assets. And he is one of the most consistent top-performers in his sector. During the 10 years to May 31 2016, his fund has made 11.5% a year, gross of fees, and 10.3% net, compared with an return of 4.3% a year for the average fund in the Europe ex-UK sector and 4.4% for the FTSE World Europe ex-UK index. Over the decade, it is the second-best performer out of more than 100 funds in the sector. He aims to identify a small, concentrated portfolio of between 35 and 45 “special” companies – ones that make money from intellectual property rather than capital spending and are profitable no matter what the economic backdrop. Corporate governance and engagement are key to his process. Darwall and his team attend over 200 company meetings a year across sectors, to make sure they have the right stocks. Despite its large size, the fund has an “active share” – a measure of how far it differs from benchmarks – of 91.3%.
Harry Nimmo - Standard Life Investments
Nimmo, one of the best-known and most consistent performers in the UK Smaller Companies sector, has been managing Standard Life’s £1.2 billion fund since 1997. During the 10 years to May 31 2016 the fund has returned 12.4% a year, on average, compared with 8.2% a year for the average fund in the sector, and placing it 6th of 47 funds. In February, fund performance analysts FE Analytics gave him the number-two slot in its top 20 Alpha Managers for 10-year performance and consistency. In the shorter-term, the past two years have been an interesting period for Nimmo and his fund; throughout 2014 he underperformed and even suffered the ignominy of having the fund labelled a “dog” in wealth manager Tilney Bestinvest’s infamous list of underperformers. But during 2015 and this year, the fund has turned around and climbed the rankings once more to the number-three slot in its sector, with a 12-month return of 13% to the end of May – a vindication in the face of criticisms that his fund has become too large, unwieldy and focused on mid-cap stocks rather than small-caps. In December, the 59-year-old also moved to allay concerns over his tenure, committing to run Standard Life’s UK Smaller Companies trust for at least another seven years, giving him a 25-year performance record on his funds by 2022.
James de Uphaugh and Chris Field - Majedie Asset Management
De Uphaugh and Field founded Majedie in 2002, alongside three other colleagues from Mercury Asset Management, and the two UK funds they have managed since then, alongside various colleagues, are the firm’s original strategies. During the 10 years to May 31 2016, the UK Equity fund has returned 9.5% a year and the UK Focus fund has made 11.9%, on average and gross of fees, while the FTSE All Share has returned 5.3%. These are results that put them near the top of their peer group; and the few that have done better are mostly specialist mid-cap strategies. The funds both closed to new investment in 2006 when their combined assets totalled £3 billion – their assets under management today stand at £8.9 billion solely as a result of investment performance. De Uphaugh, as chief investment officer, and Field have also overseen the growth of Majedie into a full-fledged boutique with £11.7 billion under management in seven funds, alongside chief executive Rob Harris. They have taken a “grow your own” approach to investment talent through a graduate programme instituted in 2009, with five of the firm’s current 16 equity analysts and fund managers having come in through this route.
Neil Ostrer and William Arah - Marathon Asset Management
Marathon, founded in 1987 by Ostrer and Arah alongside Jeremy Hosking, is a low-profile but consistent equities manager, that has grown to manage almost £40 billion. Its success has continued despite Hosking’s 2012 exit and the distraction of related legal action. Ostrer and Arah, as founders and co-heads of global equities, are responsible for the firm’s investment philosophy, which is based on an analysis of how capitalism interacts with stock markets and which industries are raising money. The two play a co-ordinating role on the firm’s global funds, allocating money between 10 regional portfolio managers. Marathon’s global equities strategy has delivered an average annual return of 8% a year in dollar terms, during the 10 years to June 30 2016, comfortably ahead of the MSCI All Country World index on 4.3%; if the fund was in the Investment Association’s global equity universe it would be in 7th position out of 260. Most of those ranked above it are specialist funds. Its European equity fund, for which Ostrer determines allocations across the team, has made 6.7% a year in euro terms over the same period while the MSCI Europe has made 3% a year. That would put it 3rd of 50 in an IA table of European funds. Arah specialises in Japan, and his fund is up 3.2% a year over the decade – well ahead of the MSCI Japan’s lacklustre 0.33%.