Look out for fund managers with dodgy music tastes. I couldn't help taking note of a fund manager w...
Look out for fund managers with dodgy music tastes.
I couldn't help taking note of a fund manager who said recently his musical interests included Captain Beefheart, Syd Barrett and Arthur Lee. Any guesses who it might be?
Well if you read the same FundsNetwork newsletter from last November as I did you'll know the answer. Neptune's Robin Geffen.
Intriguingly, as he graduated from university in 1979 it seems the days of punk passed him by, or he just had an old head on his shoulders, which is no bad thing when you're a fund manager.
But more important than Geffen's musical tastes was the following comment: "I expect the Beijing Olympics will start the same kind of extraordinary bull market that the 1964 Olympics in Tokyo did for Japan."
This reminded me of the 1980s when Aetna launched the Iberian Growth fund ahead of the 1992 Barcelona Olympics with a similar prediction.
The Aetna premise was that the infrastructure spending required combined with positive tourism benefits would kickstart the Spanish stock market. It seemed a woolly marketing-led line at best and, while the marketing team clearly believed it, the fund manager concerned didn't seem too convinced. To his credit he toed the party line, but I don't remember too many advisers falling for the story and the Iberian Growth fund went the way of the rest of Aetna's fund management business. Age stops me remembering who snapped it up.
So when I bumped into the Aetna manager six or seven years later, as we judged the first Investment Week fund manager of the year awards, both he and I were mildly embarrassed to recount the story.
Who was that manager? Tony Zucker, now plying his trade at Thames River as part of its European team.
I related the story to Geffen when I saw him recently, prior to the recent correction in the Chinese market, and he smiled as replied: "But it's different in China."
And of course he's right.
China is not Spain, but it might well be the Japan of the 1950s, 1960s and 1970s.
His thesis is a simple one. The sheer will to get things done in China means no amount of European or Indian-style bureaucracy is going to stop the economy expanding and this will translate down into the stock market, but also many of those companies listed outside of China which are, and will, prosper from its expansion. Geffen and the Neptune fund, along with a number of managers, are playing China in this dual way through direct and indirect exposure.
Geffen also pointed to the World Trade Fair heading to China two years after the Olympics as part of the bull story.
Personally I'm convinced, but just watch out if a European manager starts telling you about the benefits of Austria and Switzerland ahead of next year's European Football Championship. He clearly hasn't seen England play recently.
Incidentally, I've just written this column listening to the Clash, in honour of the last days of the Hammersmith Palais, which closed last week. Now that was music. Perhaps Should I Stay or Should I Go? would be a better anthem for fund managers. Suggestions welcome.
Lawrence Gosling is the founding editor of Investment Week, his views are his own. Any comments to him at [email protected]