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A week in the life of Simon Gergel

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13 March 2014

Simon Gergel, Manager, Merchants Trust and Chief Investment Officer UK Equities, Allianz Global Investors.

View the Merchants company profile page

This was one of the busiest weeks of the year for company communications with many businesses reporting and several management teams making themselves available for meetings with shareholders and potential investors.

The first hour or so of every day involves catching up with breaking announcements from companies and any other key news items affecting markets or economies around the world.  This process involves reading press releases, discussing issues with our own analysts and speaking to external contacts where relevant.

At 8.30 am every day we have a video conference with our European, emerging markets and global equity portfolio managers and analysts across Frankfurt, Paris and London to discuss important events, analyst recommendation changes, new reports from our GrassrootsSM market research organisation and general themes.

Big themes this week have included the 5 year anniversary of the market trough in 2009 and the significant revaluation of the market since.  Also very large number of fund raisings by companies, share sales by insiders and initial public offers (IPOs), all potentially signs of an extended market.  I do not spend too much time thinking about most IPOs, the sellers always have more information than the buyers and they generally pick their time to sell to maximise their proceeds.


Monday starts with a short administrative team meeting among the UK portfolio managers to communicate and discuss any internal corporate developments, to co-ordinate diaries and discuss which companies or sectors we are planning to analyse during the week.

Meeting with Kier Group, a UK construction and property development company, discussing strategy and recent results, in particular how they work with public sector bodies to develop brownfield sites for housing and other uses.

Monthly internal management meeting discussing any important issues within our teams and global initiatives across the business.

Sector review meeting – natural resources and utilities.  Each week our research analysts present and discuss key themes or specific stock ideas on a sector of the market.  This week we covered the potential opportunities in the oil services sector, trends among oil majors and the outlook for European utilities.


Early meeting with a stockbroker to discuss the forthcoming flotation of Lloyds insurer Brit Insurance, a business we know well as we owned it last time it was a quoted company.

A six-monthly catch up meeting with the Morningstar analyst who covers The Merchants Trust to discuss recent performance and any significant portfolio changes and themes.

Group lunch meeting with management of William Hill, discussing in particular the risks to fixed odds betting terminals in bookmakers and the outlook for online and mobile gambling where they are industry leaders.

Short chat with an emerging market debt colleague about trends in that market which are relevant for our investment in Ashmore Group plc.

Interview for a potential administrative assistant to join the investment teams.

A discussion with an external analyst on a financial company we are considering investing in.


Early start - flight to Scotland and meetings all day with wealth managers in Edinburgh and Glasgow.   I spend four or five days a year visiting shareholders in The Merchants Trust.  This trip coincides with the 125th Anniversary of the Trust which has always invested in a diversified portfolio of high yielding investments.  I find it useful to see key investors regularly to keep people informed about how we are managing the Trust’s portfolio.  It provides a good challenge on what we are doing and useful feedback for the Trust’s board on investors’ expectations.  These meetings also remind me about what the end investor is ultimately looking to achieve.  It was pleasant to see my first Edinburgh tram after years of road works.


An unusually busy day with four company meetings.

Goals Soccer is a small 5-Aside football company which we own in the Allianz UK Equity Unconstrained Fund.  It was looking to raise additional money to fund expansion.  We also had a meeting with insurer Admiral which discussed the many changes going on in the insurance industry and their strong competitive position within the market.

We also had senior management in from two very large companies, HSBC and BP, where we have significant investments.  If there is a common theme it is about rebuilding the companies’ reputations after a troubled period.  HSBC has come through the global financial crisis relatively well but is still building up capital levels and has a key priority to improve compliance procedures.  BP is recovering from the Macondo disaster in the Gulf of Mexico and is transforming the business with a focus on fewer, more profitable assets and improved cash flow per share.


Thankfully a bit quieter than the rest of the week.  This gave me a chance to finish writing the Fund Managers Report for The Merchants Trust PLC.

Our weekly team meeting discussed in depth some of the companies we had seen and analysed recently.  In particular we discussed a colleague’s scenario analysis on Ashmore Plc.

Lunch meeting with the senior management of BAE Systems, another large investment in our funds.  Key discussion points were the outlook for US defence spending now that “sequestration” has ended and export opportunities for the Eurofighter Typhoon and Joint Strike Fighter aircrafts.

GrassrootsSM Research is a division within the Allianz Global Investors group of companies that commissions investigative research for asset-management professionals.  Research data used to generate GrassrootsSM Research reports are received from reporters and field force investigators who work as independent, third party research providers, supplying research that is paid for by commissions generated by trades executed on behalf of clients.

Merchants seeks to enhance returns for its shareholders through gearing in the form of long-term debentures. Gearing can boost the Trust’s returns when investments perform well, though losses can be magnified when investments lose value. You should be aware that this Trust may be subject to sudden and large falls in value and you could suffer substantial capital loss. Derivatives are used to manage the trust efficiently. Covered call options are written to supplement the income generation of the portfolio. This may lead to an opportunity cost if options are exercised.


This is no recommendation or solicitation to buy or sell and particular security.

Investing involves risk. The value of an investment and the income from it may fall as well as rise and investors may not get back the full amount invested. The views and opinions expressed herein, which are subject to change without notice, are those of the issuer and/or its affiliated companies at the time of publication. The data used is derived from various sources, and assumed to be correct and reliable, but it has not been independently verified; its accuracy or completeness is not guaranteed and no liability is assumed for any direct or consequential losses arising from its use, unless caused by gross negligence or wilful misconduct. The conditions of any underlying offer or contract that may have been, or will be, made or concluded, shall prevail. This is a marketing communication issued by Allianz Global Investors Europe GmbH, an investment company with limited liability, incorporated in Germany, with its registered office at Bockenheimer Landstrasse 42-44, D-60323 Frankfurt/Main, registered with the local court Frankfurt/Main under HRB 9340, authorised by Bundesanstalt für Finanzdienstleistungsaufsicht ( Allianz Global Investors Europe GmbH has established a branch in the United Kingdom, Allianz Global Investors Europe GmbH, UK branch, which is subject to limited regulation by the Financial Conduct Authority ( Details about the extent of our regulation by the Financial Conduct Authority are available from us on request.

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