King’s Coronation: In the hot seat

Taking over from a respected predecessor can be a challenge, even if you are not the head of state of the United Kingdom. The Association of Investment Companies (AIC) has collated comments from investment company managers who have taken on the lead role at their companies over the past year.

There are comments below from Mike Seidenberg, who took over as lead portfolio manager from Walter Price at Allianz Technology Trust in July 2022; and Dan Nickols, who took on Rights and Issues Investment Trust alongside co-manager Matt Cable after Jupiter Unit Trust Managers was appointed to run the investment company following the departure of Simon Knott in October 2022.

Walter Price and Simon Knott were both long-serving managers. Walter Price’s stint at Allianz Technology Trust began in May 2007 and lasted 15 years until his retirement in December 2022, while Simon Knott was the second-longest serving manager of an investment company at the time he retired, having joined Rights and Issues in 1984 and served for more than 38 years. Mike Seidenberg joined Allianz Technology Trust in November 2016.

Annabel Brodie-Smith, Communications Director of the Association of Investment Companies (AIC), said: “The Coronation of King Charles III reminds us that taking over from a much loved predecessor can be a daunting prospect, even when the moment has been long prepared for. We are lucky to have many successful, long-serving managers of investment companies, but eventually it’s time to pass the mantle on to the next generation. At these times, it’s important to know what the investment company stands for, so that there is a sense of continuity alongside the inevitable change.”

What did you learn from the previous manager?

Mike Seidenberg, Portfolio Manager of Allianz Technology Trust, said: “There are lots of things I could write about Walter Price, an immensely talented investor with an extremely sharp mind. He had a team around him who worked tirelessly to earn his trust and respect.

“Three things come to mind when I think about lessons learnt. The first is intellectual curiosity, wanting to understand technologies, products and services and how they impact users’ lives and the value they create. Second, intellectual honesty, running the portfolio in a manner that creates an environment where we make the best risk/reward decisions for our investors and being honest about mistakes. Third, collaborate: work closely with your teammates to identify best ideas by a rigorous challenge process, understanding every pound we invest has an opportunity cost. It’s also ensuring we are optimising the portfolio; for example, avoiding a subsector like data storage and instead deploying the capital into cloud infrastructure.”

Dan Nickols, Manager of Rights and Issues Investment Trust, said: “My predecessor, Simon Knott, had a highly successful 38-year tenure, building a trust with a strong heritage and robust principles at its core. Our approach to taking over the trust has been to retain the best of this heritage, combining it with the benefits of a large, well-resourced investment team and market-leading investment platform. A concentrated and high-conviction approach has been a hallmark of Rights and Issues over the years, and we have continued in that tradition, keeping the portfolio concentrated on a smaller number of our highest conviction ideas.”

Was it easy to step into the previous manager’s shoes?

Dan Nickols, Manager of Rights and Issues Investment Trust, said: “While we never worked together formally as managers, Simon Knott gave us the benefit of his knowledge and experience of the portfolio companies as we worked closely together during the handover period. Now that he sits on the board of the trust, it has been a privilege to continue to benefit from his wealth of insights into UK smaller companies.”

Mike Seidenberg, Portfolio Manager of Allianz Technology Trust, said: “I worked with Walter for more than 12 years and learned a lot from him and the team. I think of myself as a torch bearer who will continue to improve on and refine our investment process, which is something we are always looking to do. Our personalities are different, I am much more likely to ‘walk the halls’ with the team, but our love for technology is the same. It is this enthusiasm and passion to learn that I hope to instil in the team so we can identify the secular themes which have made the fund successful over time.”

How have you and the team adapted to the transition?

Dan Nickols, Manager of Rights and Issues Investment Trust, said: “We were honoured to be appointed to what in our view is one of the most successful and venerable investment trusts in the UK small cap sector. The process of combining the best of the trust’s heritage with the extensive resources we bring as a team and company has been an exciting and fulfilling one. We look forward to continuing this process with a view to maintaining the trust’s reputation for being a truly differentiated and compelling investment opportunity for existing and potential shareholders.”

Mike Seidenberg, Portfolio Manager of Allianz Technology Trust, said: “So far I am pleased with team and transition. It is worth noting I have worked with Danny Su for more than 12 years and personally recruited and hired Rich Gorman a couple of years ago. Erik Swords and Justin Sumner joined on 1 July and they have been a welcome addition. The team has high expectations for one another and this drives the work ethic and accountability. This element of our fund preceded me and is a key ingredient to our long-term success.”

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