Andreas Brock and Henrik Milton, Fund Managers at Coeli are our Fund Managers of the Month. We interviewed them to tell us more about their insights to the asset management industry and their challanges as portfolio managers.
When and how did you start your career in the financial industry? Did you have any other vocation?
We have both have had ”real” jobs before we came into the financial industry, with both of
us having worked at the Swiss-Swedish engineering company ABB in various roles. Henrik
began working in the finance industry in 2001 as a fund-of-fund manager and then later a global equity fund manager and Andreas started his career in 2007 at Capital Group in London as an investment analyst. The global equity fund we co-manage was created in the end of 2014.
What’s your biggest challenge as a portfolio manager?
The biggest challenge is always time management. There is always something new to learn,
something more to explore in a new or existing holding and as we love our jobs so much, we have a tendency to work a lot and do too much. We are getting better and better at prioritizing our time and energy which we believe explains why the fund is doing better and better. (Note: Their global equity fund has outperformed its index by some 30% over the last five years).
What sustains your drive within the industry?
That there is always something new to learn, it never ever gets boring and that you get to meet so many amazing people and learn about so many great companies and business models is a privilege. Then comes the whole responsibility part, managing other people’s
money, we take a lot of pride in being fiduciary managers, it gives meaning to our lives. We are not just doing this because it is so much fun, we are doing it to help thousands of people.
What has been the most extraordinary thing you have seen in markets? How do you see the next steps regarding the second wave of COVID-19?
In general, we believe the financial markets are basically always correct and our view is that
if your portfolio is lagging your index for more than three months, then it is not the market
that is the problem, it is you. Market anomalies typically never last for more than a quarter, and there have been quite a few of them in the last couple of years. The surge in European equities in early 2015 was crazy, similarly the market decline in early 2016 (does anyone still understand what that was about?) and we found the decline in November, December 2018 to be weird and somewhat amusing. Having said that, we would like to stress that in our opinion, the financial markets are very seldom wrong for more than a quarter.
Which assets do you think will perform best in Q3 2020 considering the current market situations? Which assets are performing well under stress scenarios?
Strong is getting stronger. The companies with the best business models and strongest balance sheets have done very well this year and will likely continue to do so under both stressed environment and more benign ones.
Which parameter do you value most when selecting companies?
Our investment philosophy is to invest in the “finest companies in the world” and our process have the following steps: 1) ESG 2) Quality 3) Growth 4) Valuation 5) Liquidity andwhereas all boxes should be ticked, the process has that priority order.
What key principles drive your investment processes and why? High shareholder return, with low risk and highest possible ethical standards. Why?
Because, we are in the business of making our shareholders money, but we have no interest in taking on unnecessary risk (investing in unprofitable companies with low liquidity etc), and we also want our investors to feel proud to be owning our fund because our companies are so amazing and do business in a very ethical way.
What differentiates your fund from others, and how does this differentiation bring value to customers?
If you look at our process you can see how different the fund is, for example we have ESG as priority number 1, we do not allow anything related to tobacco, weapon manufacturing, oil & gas etc etc into our fund. Then comes quality and growth and at level 4, you find valuation. Of course valuation is important but as Andreas writes in his book “You vs the market”, valuation is not that complicated, what is complicated and where an investor´s focus should lie is thinking about a company´s quality/business model and long-term growth potential.