The week starts with me arriving into London on the sleeper from Inverness. As part of our ‘midlife crisis’ two friends and I have completed a gruelling 5 day coast to coast Scotland crossing off-road on our mountain bikes. Green and red flashing market screens and a very full inbox are quite a contrast to the stunning landscapes I’ve just left behind! The curse of the fund manager is excessive amounts of information so deciding what is relevant becomes both a skill and a necessity. One of benefits of an investment style which focuses on the long term is that much of the short term noise must and should be ignored.
It doesn’t take long before the first of many meetings of the week start. First up an IPO. IPOs are a significant source of new investments within the environmental universe. Indeed over the last 10 years we have seen a fourfold increase in the number of companies in our universe, many of which are IPOs. The enthusiasm of new management at IPOs is always engaging!
Tuesday morning always starts with the weekly global fund management meeting. As a global fund manager this input is invaluable. I work in synergy with many of the other fund managers, sharing my environmental expertise with their local knowledge.
Next, time to work with the PR team. My ‘coming of age’ as manager of the Jupiter Ecology for 10 years has arrived. The fund has delivered first quartile performance against its sector and has also outperformed its global index.* These are only moments but they are important to recognise and highlight to our long standing investor base. Our view has always been that there is no need to sacrifice long term returns by investing environmentally.
Edward Bonham-Carter, our CEO, has always commented on the fact that 90% of time we are fund managers but an important 10% of our time needs to be spent on marketing, sales and PR. Today is one of those days. The AIC have organised a lunch for some 13 members of the press, to which I am invited as a presenter. The subject area is the revival of the environmental investment market. The emphasis of the day was on the recent announcement by the Intergovernmental Panel on Climate Change. It was a landmark report which, for the first time, made the resounding conclusion that “it is extremely likely that human influence has been the dominant cause of the observed warming since the mid-20th century.” The key question for us is whether this report represents something of an inflection point for investment in the sector.
Today is a back to basics day. Macquarie Bank has a Renewable Conference in town. Armed with my one-to-one list, I have 7 meetings with management of some the leading global players in the renewable space. Global and Australian wind developers, critical solar equipment suppliers, global leaders in wind turbines manufacturing. Management connection is the cornerstone our investment strategy and so this is a very productive use of my time!
I meet the management of around 250 companies worldwide each year. I stand by the phrase, ‘there are many green ideas but far fewer good green investments’. Meeting management in person is still, in my view, the best way to a true understanding of their business.
At the end of the week, I like to have a reflective moment when I think about the big picture issues and get away from micro managing. Today, I read through thematic research papers in some of our investment areas, namely on the issue of the food, energy, water nexus. I feel these are going to be highly influential topics over the next years. Issues around scarcity are perhaps not all that far off given continued overpopulation and growing wealth. Understanding the subject areas allows us to look out 3-5 years head and seek out investment opportunities before they become mainstream. I believe the investment ‘sweet spot’ remains in smaller / mid-sized companies.
I always end the week with a run through with the team about potential newflow.
This weekend is spent with the children, who have many and varied commitments. It is therefore a weekend of family, bee-keeping and cycling.
* The Jupiter Ecology Fund has returned 142.1%, compared to an IMA Global sector average of 99.4% and a FTSE World Index return of 121.5%. It is a top quartile performer; ranking 24/115 funds in the sector over ten years. Source: FE, Bid to Bid, Basic Rate Tax, Net Income Reinvested: 31.08.03 to 31.08.13