While a bit of pre-planning has its merits, a more circuitous path to career success can also have its advantages.
I’m a little biased. I once had high hopes of a performance career and got into drama school, only to realise that it was far too expensive and the prospects of making any money too small. I switched to economics and the rest is history. It’s left me with the view that there’s no harm in having been through a couple of false starts, and it may even help you in your future career.
In particular, I see some real advantages for fund managers who have had alternative starts to their career: they will often have a unique perspective on the market. Active managers need to do something different from the market, otherwise investors might as well just buy an index fund. Fund managers that haven’t taken the conventional path are often better at that.
This might be a manager such as Carl Stick, who manages the Rathbone Income Fund, who was once the head chef to the Crown Prince of Jordan. Cue all the jokes about ‘tasty returns’, but there is no doubt Stick has been one of the most consistent performers in the sector, delivering a strong and growing income. Part of his longevity is that he hasn’t slavishly followed the market up or down. He has forged his own path and not been afraid to be contrarian. As a result, he has avoided many of the pitfalls that have befallen markets during his 20-plus years at the helm.
Unconventional start
Ben Peters, manager of the IFSL Evenlode Global Income Fund, also had an unconventional start in fund management. He holds a doctorate in physics from Oxford University (in nanoelectronics no less) and had contemplated staying in education. His co-founder and brother-in-law Hugh Yarrow persuaded him to join Evenlode in the heat of the financial crisis in 2008 to help him run the group’s UK income fund. He launched the Global Income Fund in 2012.
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As well as building some deep analytical skills, his background has also helped him think differently at a time when most global managers were firmly focused on the Magnificent Seven and the US. His fund only has around one-third in the US and he has kept faith with many consumer-facing companies at a time when they have been shunned by the market. His approach has proved very popular and the fund is now over £1.5bn in size.
There are also fund managers who have focused on a specific industry, but held a range of different roles within it. Marcus Phayre-Mudge has been manager of the TR Property investment trust since January 1997. However, his ability to root out opportunities across global property markets has undoubtedly been helped by his training as a surveyor. He started out in the 1990s with Knight Frank & Rutley.
Investing as a 10-year-old boy
Mark Ellis at Nutshell has been on all sides of financial markets. His background was very much as a trader: “I grew up in Yorkshire in the 80s and, as a young boy, badgered my mum to open up a share trading account. It was a time of all the Thatcher supply-side reforms. So we were having lots of privatisations. I participated in all those privatisations. And I subscribed to the penny share focus and the penny share guide. And as a young 10-, 11-year-old boy, I was investing in equities all those years ago. And that really gave me the incentive to forge a path into the City.”
Having read economics at the LSE, he started a career at NatWest Markets. But then he decided to go back into education, did a Master’s in finance and had his dissertation published in the Journal of Asset Management. It looked at how investors could use momentum strategies to deliver higher returns from the FTSE 350. That was the germination of the Nutshell Growth Fund, but Ellis spent more time as a trader and hedge fund manager before launching the fund in May 2020. This is a manager whose breadth of financial market experience has helped create a unique and differentiated fund.
Finally, an honourable mention needs to go to David Dudding, manager of the CT Global Focus Fund, who studied history and started his career as a journalist with the Investors Chronicle, before going back to university at 28 and doing a Master’s in European politics. From there, he joined the graduate programme at Threadneedle and the rest, as they say, is history.
While it wouldn’t stand up to quantitative scrutiny, I believe a circuitous path can be an advantage in fund management. It helps a manager take a different view and to stand apart from the market and their peers. Just like a flirtation with drama school.
Juliet Schooling Latter is research director at FundCalibre
Past performance is not a reliable guide to future returns. You may not get back the amount originally invested, and tax rules can change over time. Juliet’s views are her own and do not constitute financial advice.
