Fund managers diary
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Simon Mungall is the head of multi-manager at Ignis Asset Management. His diary runs from November 21-27, 2009.
Saturday Many foreign managers come through London every year but I prefer to meet them in their own offices, where I have their undivided attention and they are more circumspect about their prospects. This year I am taking advantage of a special rate on round-the-world tickets from One World [an airline alliance].
Sunday The sunrise in Dubai reminds me of a consolation of the trip but I am straight into meetings with five fund managers running money in Middle East and North African markets. I am intrigued by the region’s underperformance of other emerging markets during 2009 and suspect it is more to do with the decision-making process at multi-asset managers than relative fundamentals. Dubai itself—a cross between Disney World and Canary Wharf—is little guide to what is happening fundamentally in the region, and the extent to which it remains the region’s poster child in the mainstream press is disappointing.
Monday Hong Kong today and meetings with a few new names we have been following—two we know through investments in London and the other with a New Jersey firm. I like the blend of local market insight and developed market rigour on display and am pleased we are finding new talent in an asset class that is perceived back home to be dominated by a few established players. (article continues below)
Tuesday My fears about Asian valuations rising too far too fast are mitigated somewhat by the prevalence of concern here about a potential bubble. Indeed, the analytical focus is on the success required to meet the earnings implied by share prices. As I mull this over on the flight into Singapore, I am struck by the number of ships at anchor in the bay under the flight path; clearly there is spare capacity out here yet.
Wednesday I call on the Asian desk of Somerset Capital Management who run a GEM [global emerging markets] fund we own and it is good to see some familiar faces. We have a debate about the long-term drivers of markets over a coffee in the old business district. I manage a run before heading to the airport, after a meeting a manager who has launched a fund we can buy.
”I am struck by the number of ships at anchor in the bay under the flight path”
Thursday I am pleased with my decision to take hand luggage as I head straight out of the terminal at Narita [one of Tokyo’s airports] after my third overnight flight of the week. However, my policy of travelling to meetings on foot or public transport, in an effort to understand the economic vibe, means I spend the day struggling in culture shock. Vincent Ropers is holding the fort back in London and we spend our daily Skype call focused on the implications for global risk appetite of the Dubai restructuring. Vincent and I were in New York the weekend Lehmans went bust and we joke about our ability to pick the time and location of the year’s most popular default. We reckon concerns are overdone and hope the price action is evidence of the increase in issuer-specific scrutiny we are expecting.
Friday Dollar strengthening on the Dubai news is helping the Japanese markets; we opened a meaningful position in Japan at the end of October and I hope this marks the end of a difficult few weeks. It is sobering that there are fund managers here with 20 years’ experience who saw the high on the Nikkei the day they started work, and it tends to be those with time in the West on their CVs that are most bullish on valuations. I am happy with my position and decide to keep some ammunition in the locker until after the American leg of my trip.
