M&G, that most venerable of fund houses, provided some fascinating insights into the changing nature of investment at a dinner this week.
M&G was celebrating the 40th anniversary of its £3bn Recovery fund and wheeled out all three past and present managers of said vehicle to reminisce in the convivial setting of its grandly titled Governor’s House.
The contrast between the trio’s tall tales was stark.
The most colourful anecdotes provided by David Tucker, who managed the fund from 1969 to 1987, all seemed to concern Yorkshire businessmen engaged in metal bashing or construction, several of whom seemed to have difficulty remaining strictly within the law.
In comparison, the most engaging tales proffered by Tom Dobell, the current incumbent, concerned harrowing trips to Ghana and Papua New Guinea – and this from a fund that invests purely in UK-listed stocks. That’s globalisation for you.
Richard Hughes, like Mr Dobell, oversaw the odd banking crisis or two during his tenure from 1987 to 2000. But the solutions were rather different. He reminded those present that when Standard Chartered and Midland Bank ran into difficulties, new chairmen were parachuted in from the Bank of England, a solution that “couldn’t happen now. The expertise just isn’t there.”
However Mr Turner probably provided the most illuminating comment when he revealed he stepped down soon after the passing of the Financial Services Act of 1986, because it “made a lot of what I did illegal”. Exactly how far his tongue was protruding into his cheek was difficult to tell as he multi-tasked with devouring his dinner.
The longevity of the fund, and the fact it would have turned £1,000 invested at launch into £297,000 today, demonstrates the potential upside of long-term investing. But some of the details hint at the potential difficulty of doing so.
Of the top ten stocks in the fund in December 1969 only one, the slow car crash that was BTR Leyland, is familiar to your correspondent. Even the listing from 1980 has unfamiliar names such as Keyser Ullmann and something called Peachey Property, an adjective that certainly could not be applied to the sector today.
More gloriously still, the good people from M&G provided their humble guests with a reprint of the Financial Times from 14 May 1969 (cover price 8 pence), the day the fund was launched, despite their continuing bitterness that the FT’s unit trust correspondent of the day (one Richard Lambert, whatever did happen to him?) did not deem the launch worthy of valuable newsprint.
Among a host of gems (I love the gripping front page headline “Germany decides no major new measures are necessary”, please do tell me more) is the half-page of unit trust listings.
A few familiar names, such as Framlington, Fidelity and good old M&G itself, make an appearance, alongside recognisable, if slightly unfamiliar groupings such as J Henry Schroder Wagg & Co and Union Bank of Switzerland.
But most of the section reads like a lost world, peopled by delights such as Pelican Units Administration, the dearly departed Slater Walker, Darling Management, Target Trust and, my own favourite, Charterhouse Japhet & Thomasson.
What hope long-term investment by the hard-pressed punter when the industry itself seems to find remaining in existence such a tricky task?