Exclusive: ‘Keep a cool head in hairy markets but avoid being an ostrich’, says City grandee and fund chief Andrew Bell
Witan Investment Trust is a well-know name in the City’s investment space. It can trace its history back to 1909 when it was set up to manage the investment affairs of Sir Alexander Henderson, who later became the first Lord Faringdon.
Today it holds over £2.2bn on behalf of more than 28,000 shareholders, using a fairly unusual multi-manager approach, allocating money to an army of fund managers with different styles and specialisations.
In an exclusive interview, City A.M. sits down with Andrew Bell, the CEO of Witan Investment Trust for more than a decade, to talk about the responsibility that comes with managing one of the oldest investment trusts in the UK, and how he ended up working in the City in the first place.
Witan Investment Trust is one of the oldest investment trusts and a FTSE 250 company, that heritage and size must come with a lot of responsibility?
I felt it was an honour to join Witan as CEO in 2010, given its standing as a City institution with a 100 year history. However, the real appeal was the opportunity to put what I had learnt about markets, economies and human behaviour to work in the quest to deliver attractive returns for our shareholders. That gives a real sense of responsibility, as shareholders see daily evidence (from our NAV) of how well we are managing the portion of their investments held in Witan’s shares.
“Markets can be hairy at times so it’s important to keep a cool head but also to avoid being an ostrich.”Andrew Bell
Using a multi-manager investing approach isn’t mainstream, so why does Witan do this?
We offer investors a one-stop shop for global equity investment and a key element of our strategy is our multi-manager approach. We search for the best fund managers around the world so the portfolio is not reliant on the stock-picking skills of just one manager. This also means we can more easily change managers for a portion of the portfolio as markets and opportunities change. And this approach ensures the portfolio is diversified across sectors, geographies and companies.
So how do you choose who to invest money with or on behalf of shareholders?
The investment team, which includes myself and my colleague James Hart, regularly meet with our managers and continually monitor their performance, as well as seeing potential new managers. We are also able to draw on the expertise of our board of directors, many of whom have experience in selecting managers or investing in equities.
And if we zoom in on the portfolio?
Our portfolio is structured in two parts, a core portfolio which represents 75 per cent of the portfolio and currently consists of five global managers and one UK manager and a specialist portfolio which represents 25 per cent of the portfolio. This portion gives us the flexibility to invest in specialist managers covering areas such as climate change and emerging markets, together with funds investing in areas demanding particular expertise, such as private equity and biotechnology.
“The City is a wonderful place, full of opportunities.”Andrew Bell
When we look at managers, we look for those with disciplined and well-resourced investment approaches that invest in companies with sustainable cashflows, whose growth prospects are underestimated. It is really important that these businesses are adaptable to change, have good management teams and sound finances. This is particularly important when investing in an increasingly changeable world.
So what sort of areas are you most interested in?
In addition to our core managers, we are particularly interested in the continued growth of technology and the new medical fields of genomics and cell and gene therapies. There are amazing advancements in treatments in these areas that are having a real impact on people’s lives. The other area is climate change; you would have had to be living in a cave not to have seen coverage of COP26 in Glasgow last October, and it has made the issue real for many people.
Finally, given investment trusts were traditionally viewed as a niche product, how did you end up as CEO of Witan?
This is actually quite a funny story. At the start of my career, having decided politics wasn’t for me, I ended up working in Oman for Shell. As many of the local employees didn’t have formal qualifications, Shell conducted aptitude tests on them and a few expatriates were asked to be part of the programme. On receiving my results, someone asked me what on earth I was doing working in the oil sector, which I think was a positive comment!
“After some soul-searching, I decided to try my hand working in the City, and the rest as they say is history.”Andrew Bell
It has been a great place to be and I have loved every minute of it from a start in equity broking, becoming co-head of investment trusts at CSFB then head of research and strategy at Rensburg Sheppards, prior to taking up my current role in 2010. I have been on the board of a number of investment trusts and served a term as chairman of the Association of Investment Companies (AIC), which has made great efforts to de-mystify the sector by providing quality information to a wider range of investors than in the days of yore when it used to revel in being the City’s best-kept secret. The City is a wonderful place, full of opportunities, which fulfils a key role in channelling people’s savings to fund economic growth and channelling returns back to fund people’s lifestyles and retirement.