Capital at risk. The value of investments and the income from them can fall as well as rise and are not guaranteed. Investors may not get back the amount originally invested.
Risk: This material is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or financial product or to adopt any investment strategy. The opinions expressed are as of October 2022 and may change as subsequent conditions vary.
How long have you been investing in UK Equities?
I joined Blackrock through the graduate scheme in 2000, but moved to UK equity in 2001 just in time to appreciate the final stages of the dotcom crash, a particular skill of timing I would repeat by starting to manage portfolios at the end of 2006 just as the global financial crisis was brewing.
What excites you about investing in the UK equity market?
Whilst the common perception of the UK market is generally dull and value orientated, that really is only part of the story. The UK market, whether it be large or small market capitalisation, is much more international than the major peers. We are home to some of the top universities, have an entrepreneurial culture, a market that is welcoming to early stage companies, and clear legal protections. The result is a lively diverse market that is home to some truly amazing companies, and active capital markets that through mergers and acquisitions allow management teams to quickly grow and adapt their businesses.
What role do you believe the products that you work on play in a client’s portfolio?
There is no doubt in my mind UK Smaller Companies can add to client portfolios, both in terms of return, which historically has been greater than large companies, but more through diversification. The make up of the Smaller Companies sector is very different to the FTSE100 which allows access to different sectors or markets, whilst the businesses themselves tend to be more focused and entrepreneurial, able to rapidly shift focus to take advantages of opportunities that present themselves.
What would you say has been the most memorable time period of your investment career?
This sort of question starts to make me feel old. The temptation is to answer with one of the market defining moments, whether that be the dotcom fall out, the global financial crisis or COVID, all of them hold memories, not all of them good, but certainly periods I will never forget. But often it is the period of reflection afterwards that sticks in my mind, when we look back and say “did we really value technology stocks on enterprise value to eyeballs?”, or “did banks really leverage up fifty times?”.
How do you think about environment, social and governance (ESG) factors when analysing companies?
I’ve always had strong beliefs that companies that treat their employees with respect, invest in training, think about the societal and environmental repercussions of their actions, and engage with investors through appropriate governance functions are going to do better than those that don’t. Whether it comes from lower employee turnover which leads to greater efficiency and lower costs, or through reputational integrity that comes from not being in the news for the wrong reasons, it’s always been obvious to me these actions will lead to better investment returns. ESG isn’t something new to us, it has always been a core part of what we do.
ESG Investment Statements: This information should not be relied upon as research, investment advice, or a recommendation regarding any products, strategies, or any security in particular. This is for illustrative and informational purposes and is subject to change. It has not been approved by any regulatory authority or securities regulator.
The environmental, social and governance (“ESG”) considerations discussed herein may affect an investment team’s decision to invest in certain companies or industries from time to time. Results may differ from portfolios that do not apply similar ESG considerations to their investment process.
