Fund manager’s diary

Martin Cholwill is the manager of the Royal London UK Equity Income fund. His diary runs from 24 to 30 September.

Martin Cholwill 450 Index

aaMonday It is a quiet start to the week in terms of company newsflow, with the only announcement of interest for me being an in-line trading update from Diploma, one of my holdings; the company is showing no signs of slowing down and has had another year of strong cash generation.  This morning we have a meeting with one of the sponsoring brokers of the forthcoming Direct Line insurance IPO.  As is the norm these days, there is a cast of thousands on the deal and what I have heard so far makes me think that it will need to be ‘priced to go’, given its recent track record.  The afternoon includes our weekly equity team meeting, at which we discuss recent developments; our base case remains one of anaemic economic growth, with tail risk reduced by QE3.

Tuesday A signal failure on the Metropolitan line delays my start this morning.  I have a client meeting in London to prepare for and attend mid morning.  A typical week includes about a fifth of my time marketing, a significant time commitment.  Just as fund managers like to meet the management of companies in which they invest on a one to one basis, our clients similarly like to meet us.  This week all my meetings are London-based, which keeps logistics straightforward.  I arrive back in the office to find some good flows into my fund, which I invest into existing positions.

Wednesday As usual the first task of the day is to read all of the morning’s company news announcements.  Team discussion centres on a positive investor seminar we attended by AZ Electronics, one of my investments.   We have a lunchtime meeting at our offices with Close Brothers, another holding, at which the management team gives a strong account of themselves.  The company has done well since the credit crunch in profitably growing their specialist lending book; a classic ‘survivor bias’ benefit of competitors retrenching or withdrawing from the market.  This is the real silver lining for recessions, which I look for in companies.  Another client meeting in the City follows late in the afternoon.

Thursday The highlight of the day is an informative and insightful meeting with the management of Royal Dutch Shell at our offices.  I was particularly reassured about their longer term dividend paying potential; a testament to their cash-generating ability is they can borrow 30 year money at 3.6 per cent.  One of the things that I really love about my job is the opportunity to meet company senior managements; to have the luxury of meeting them on a one to one basis is a real privilege.

Friday The week closes with a relatively quiet day for company news.  I spend some time catching up with reading, returning phone calls and some report writing, as today is the last day of the month and the quarter.  My only meeting today is with a banks analyst from an investment bank to discuss the sector; I still think most banks remain uninvestable.

Saturday/Sunday A slightly chaotic weekend ahead with both of my daughters going off to university at the start of the next week, the younger one for the first time.  Packing is combined with the sudden realisation of the need for some last minute shopping.  All parents who have been through this process will know the sheer logistical challenge involved!  As both of them are at the same university, I expect to become very familiar with the drive up the M40 during the course of the next academic year.

Martin’s diary runs from Monday 24th to Sunday 30th September.