For their part, the F&C team are invested with Godber and Hamilton’s ex-Matterley colleague Henry Dixon, who runs the Man GLG Undervalued Assets Fund. A concern is that the moves could cause more money to flow into Dixon’s fund and potentially compromise performance.
Expanding on this topic, Potter says: “We were talking to Clive Beagles recently, who is deliriously happy his JO Hambro UK Equity Income fund has gone from £2.9bn to £2.4bn. This means he can buy more of the right stocks at the right time in the small caps space.
“He is investing in miners and oil but not gung ho. Interestingly, he has 39% in financials, which is his big bet and is a view he shares with Jupiter’s Steve Davies and Old Mutual Global Investor’s Richard Buxton.”
A different drum
With an eye on the value/growth debate, the pair are certain that those managers who can think differently will benefit as “the elastic gets stretched too far” and there is a reversion to the mean.
“We have always been true to the basic belief that we are buying the people, and if you get the right manager from the right company at the right time, you will make far more money than from moving asset allocation,” says Potter.
Acknowledging the longevity of his career, he says: “Adrian Frost was the first manager I ever met in 1989, and I asked him recently what the stock we first spoke about was. After all that time he remembered it was Daily Mail and General Trust.
“It’s a personality business, and if you can connect with the people, and our clients can connect with us, you have a much better chance of being honest and transparent, and that’s what is really important.”
