Portfolio Adviser has launched a new series entitled ‘Branching Out’, where we speak to highly-regarded members of the industry who previously held very different careers before working in asset management.
In the third instalment of the series, we speak to Dr Paul Jourdan, CEO and co-founder of Amati Global Investors.
Before beginning his fund management career in 1998, Jourdan worked as a professional musician, which included a four-year stint as a violinist with the City of Birmingham Symphony Orchestra.
“As a fund manager, we talk about performance all the time,” Dr Paul Jourdan (pictured), Amati CEO and former concert violinist, told Portfolio Adviser. “You can pop out a good performance but the job is never finished. You can never look back and say, ‘Wasn’t that great?’ Because tomorrow might be horrible.
“It is the same kind of pressure [as a musician], but perhaps more so, because it is even more ‘real time’ if you’re a violinist. However, the pressure is the same. So, learning to be a performer is actually a very good way of building up the resilience to live with the ups and downs [of fund management], and the sense that your job is never really done, because you’re only ever as good as today’s performance.”
See also: Branching Out: Epworth’s Rev. Dr. Andrew Harper on why investing is a ‘natural home’ for a vicar
Jourdan spent four years as a violinist in the City of Birmingham Symphony Orchestra, before leaving to pursue a PhD at Cambridge. However, his interest in investing came to him while he was still a professional musician.
“I was very lucky – early on, when I was developing an interest [in investing], I came across a wonderful person called David Fuller,” said Jourdan.
“He has sadly died now. But he used to write a monthly global strategy letter called Fuller Money… I found it very engaging and informative, and I subscribed to it. He used to advertise an event called the Chart Seminar. As a behavioural, technical analyst and a very insightful one, and he paid attention to what was going on in the world. I think that is why I liked his letters.”
PhD funded by trading Yen options and futures
After reaching out to Fuller, Jourdan was invited to attend one of the two-day Chart Seminars.
“While completing my PhD, I was partly funding it by trading Japanese Yen options through very technical signals. Before that, I had traded some futures contracts and got my fingers really badly burned. When the market moves against you on a futures contract, it can wipe you out unless you are very careful.
“There is an old rule that I learned – if you get a margin call on futures, you always have to close your position, even though it is a horrible thing to have to do. One day I got a margin call and rang somebody I had met at the Chart Seminar, and he said in this situation, that I had to close out. It was the right advice.”
Upon completing his PhD, Jourdan decided to pursue investment as a full-time occupation.
He said: “I realised that I wanted to change career and pursue what was then my hobby: investment. It had been my hobby more over approximately six years until this point, and the thought dawned on me that this is what I wanted to do next.
“I was 32 and was slightly worried about whether I would find a way into the sector. The reality was that most firms were only hiring graduates, but I found a couple of firms who were more broad-minded than that.”
His first role in the industry came at Stewart Ivory, now known as Stewart Investors, in Edinburgh.
“It was a great place to begin a career as a fund manager. At that time, it was a great investment house, specialising in growth equities, and that is where I learned my trade.”
After two years working at Stewart Ivory, it was taken over by First State Investors, presenting Jourdan with an opportunity to run a UK small-cap fund.
On being asked to apply for the UK smaller companies role, Jourdan “immediately said yes, because it was an area I had already covered somewhat and enjoyed”.
He explained: “It was quite a natural area for me to go into, even though this fund was not easy to take over. It only had one investor, and the investor wanted to take their money out, but they were locked into a contract for a couple of years. So, in all honesty, I thought I would work at the helm of that fund for two years, learn a lot and then go into something else. But here I am 23 years later, still doing the same job.”
The £544m strategy, now known as the WS Amati UK Smaller Companies fund, has returned 122.1% over the last decade, compared to the IA UK Smaller Companies sector’s average return of 73.71%.
In 2010, Jourdan took the fund with him as he co-founded Amati Global Investors.
Amati now houses three different strategies, alongside the WS Amati Strategic Metals fund and the Strategic Innovation portfolio, which launched in May 2022.
See also: Are there glimmers of hope for UK Smaller Companies funds?
UK equities have suffered from sizeable net redemptions over the last year. In June alone, a net £858m flowed out of the sector, according to the Investment Association.
Jourdan said: “The UK market has lost some of its positive reputation. We need investor money to return to the UK market. But where is this going to come from? Inflows are the missing piece of the puzzle.
“There could be quite a sudden wakening here, where early investors gain interest, and asset prices therefore increase, which in turn would attract a lot more [capital]. We are looking out for this catalyst, and we are now wondering what could bring this about.”
Jourdan believes the focus is on the government to make the UK an attractive proposition for international investors once more.
He added: “The right answer to that question, in many ways, is just to make the UK more attractive to invest in.
“It’s not just a matter of tweaking the rules around governance or pushing UK pensions funds to invest in UK equities once again, although that would clearly be helpful. Ultimately there is no substitute for improving the way the country is run so that more international investors want to invest here.”
