As Pub Club makes its triumphant 2018 return, we kick off at what is most definitely not a pub, writes Eleanor Mahmoud.
Based in an old electricity substation on the grounds of London’s first City meat market, Blacklock is brimming with atmosphere. Think exposed brick walls and specially chosen cuts of meat ordered by weight. According to Dart Capital’s Alex George (pictured left) and Patrick Kearney (pictured right), we are here thanks to an apparent lack of good pub food in the City.
Head of research George and investment analyst Kearney have been at Dart Capital since 2011 and 2014 respectively. Together with a new graduate (‘We like to develop our own talent’, notes George), they make up the boutique’s investment research team.
We order drinks and I find out how they both got to where they are now.
‘When I left university I knew I wanted to work in finance in some shape or form,’ says former Wealth Manager Top 30 under 30 finalist George. ‘And once I started to read around the subject – particularly books related to value investing – I realised I wanted to pursue a career in investment management.’
Starting in hedge fund research, he later moved to the private client world, initially completing an internship at Brewin Dolphin before joining Dart Capital.
Kearney similarly knew what he wanted. Having completed a masters in finance, he joined the firm immediately after graduating and discusses the benefit of its size.
‘In your 20s, you have to prove your competence. In a smaller business, you are trusted with more from an earlier stage.
‘We try to do our bit to help promote the industry to younger generations,’ he continues. ‘We have a number of interns throughout the year and try to give them an overview of what we do.’
Having placed a somewhat ambitious lunch order, numerous plates of food start being brought to our table. First up is the ‘all in’ platter of beef, lamb and pork chops along with plentiful sides, seconded by the sizable porterhouse steak. As we devour the meat-soaked flatbread which the platter sits on, I get to know Dart Capital a little more.
Dart Capital was established in 2008 following the management buyout from James Baxter Capital Management, a company originally founded in 1987. The team now manage £485 million of assets under management, focused on discretionary business.
The team have a buy list of around 30-40 funds. ‘Compared to many of our peers, we do have a smaller buy list. We see this as advantageous as we get to know our favoured funds inside out,’ George explains. ‘It also means our client portfolios reflect our best ideas.’
‘In peak times, we might have 10 fund manager meetings a week,’ Kearney adds. ‘We are always keeping close oversight on the existing funds we hold, but also want viable alternatives should anything change.’
Powering through the feast before us, they explain how being part of a smaller business means they can allocate capital to managers before they gain a three year track record.
‘Our portfolios can capture manager outperformance before a number of our peers,’ George says.
As we draw to a close, we discuss the year ahead – the pair want to ensure client portfolios are not too exposed to momentum.
‘We don’t fall in love with funds and styles which have performed well, reflective of the inherently cyclical nature of financial markets.’
Glass half full:
‘UK defensives: there are relatively cheap multi-national companies which have been left behind in the recent growth-led rally.’
Glass half empty:
‘High yield bonds: there has been significant credit spread compression since early 2016 and we believe that investors aren’t pricing in weakening corporate fundamentals, particularly in the US market.’