Fund Manager’s Diary

Monday The day begins with the usual plethora of company announcements and emails, particularly, this week, covering for colleagues who are on holiday for Easter. I work in a team of four fund managers analysing and investing in British smaller companies. We typically meet more than 500 companies each year, across all sectors of the British economy. We have never invested in a business without meeting its management first.

At the smaller companies end of the market, there is no substitute for meeting managements directly. It is always pleasing to meet a company that is exceeding expectations. One such business is BBI Holdings, an Alternative Investment Market-listed medical company. Having invested in the business at float in April 2004, the company is now purchasing a smaller drug manufacturer.

Tuesday I meet some smaller media companies. There seems to be a glut of these companies either floating or raising additional funds, so we can afford to be highly discriminating as to which businesses to back. I did not find one worth investing in, but I learned a little more about the sector. It is often useful to ask management teams about peer group companies and their industry reputations.

I also met a technical analyst team. I find technical analysis useful in addition to fundamental analysis, in terms of the timing of investment purchases and sales, but not something to be used alone for investment selection.

Wednesday After a long day of meetings and marketing presentation it is always great to get home to my wife and two children – aged three and six months. It is scary to think that my three-year-old can re-set my mobile phone better than I can.

Thursday We market a new fund, which will launch on May 4, 2006. Having been involved with numerous smaller companies fund launches over the past eight years, there is always a sense of excitement and nervousness. So, after a day of marketing in northern England, I am delighted to find a potential client base of interested investors for a targeted special situations fund.

Friday and Saturday The spring weather dictates that I should do some serious gardening work. This week I am returfing the back lawn. At this point I always feel I should buy shares in hire companies such as Speedy Hire, but after two days of hard manual labour, the back garden shows a definite improvement. Thereafter, I am praying for some heavy rain, which duly arrives.

Sunday After a sound night’s sleep I feel I have earned some Easter eggs. Life as a fund manager is about choosing companies that are appropriate for your fund at that moment, just like a gardener selecting plants for their garden. A gardener would not choose plants that are unsuitable for their soil type or climatic conditions. Likewise, a fund manager will not choose stocks that are inappropriate for their funds. Similarly, any gardener will monitor their plants’ performance and water and weed them. And any fund manager will continually weed out the underperformers and run the winners.

Managing a smaller companies fund is typically concerned with running the winners and aggressively cutting the losers. Having a surplus of potential good ideas to invest in, we aim to be more discriminating than many of our peer group investors, hence the rationale for the new fund.

• Justin Jordan is the manager of the forthcoming Close Brothers Special Situations fund. His diary runs from April 10 to April 16.