(Pictured above: Eleanor Mahmoud, left, Andrew Rees, middle, and Alex Foster, right)
Commonly when writing a Pub Club feature, the natural flow of conversation in the meeting automatically dictates the content of the article, writes Alex Foster. Sometimes the hardest part is to simply think of some humorous catch line for the opening paragraph. This week, having met Andrew Rees of EQ Investors (EQ), the pieces simply fell into place, Rees’ pieces if you like.
Wealth Manager’s Eleanor Mahmoud and I ventured to Jamies Wine Bar to visit Rees. Sitting down with a cider, beer and gin and tonic (obvious choices in a wine bar), we began to discuss how Rees forged his way in the investment world.
Canadian Rees, who is originally from Vancouver, moved to the UK after university and began his career in the media world with Euromoney Institutional Investors. Following this he moved on to study a masters in wealth management, where he initially fell in love with portfolio management.
‘I always wanted to work with private clients as I like the accountability,’ says Rees. ‘Knowing your investors personally keeps you focused on the impact of your investment decisions.’
Rees joined Bestinvest in 2010 as an assistant investment manager before moving to EQ to become an investment manager, working on the firm’s bespoke client portfolios. He made the switch shortly after former Bestinvest founder John Spiers moved on to set up EQ, and it’s there that Rees found a rather rare opportunity.
‘John Spiers has given staff the opportunity to buy into the business,’ explains Rees. ‘Knowing that you’re invested in a company like that means we know we are here for the long term, and we aren’t afraid to put our roots down. I’m more engaged with the company than I’ve ever been elsewhere before.’
Being invested in the firm, it makes sense for all the team to contribute to the decisions made for its buy list. Through this, Rees has seen the potential of investment opportunities such as social impact funds.
‘I was initially sceptical of impact investing, but now I can see there are fantastic growth opportunities there and I have been converted,’ Rees says. ‘Fund houses like WHEB and Impax all have really excellent-performing impact funds. Around 10% of most portfolios will have impact investments in them because we believe in the investment opportunity.’
I ask Rees what EQ is particularly bullish on at the moment and therefore the discussion turns to volatility.
‘We are particularly keen on biotech at the moment. Some are wary because of its volatility but it’s all about positioning,’ says Rees.
‘This is the same for more volatile investment trusts, we’re very happy to back them, but again it’s all about positioning.’
It turns out that a bullish approach is taken in EQ’s investments across the board.
‘We have to find areas for growth. We aren’t afraid to keep the risk on while markets are rallying, as this growth will serve as a safety net for when markets turn,’ argues Rees. ‘Being too conservative too quickly means you lose on the upside.’
As I sit pondering whether to go and get a pricey but succulent second pint, Rees shares his opinions on the tech industry.
‘We really like the tech industry, but trying to guess what the next big technology is going to be is near enough impossible,’ he says. ‘What you have to do is look at firms that are integrating technology fully into their businesses. These are the ones worth investing.’
‘US tech stocks are particularly interesting, they generate huge amounts of cash so they aren’t as speculative as in the past, we’re happy to maintain our exposure to them,’ Rees says.
‘For example, would you bet against Amazon doubling its size in the next few years? I wouldn’t.’
GLASS HALF EMPTY:
UK domestic stocks. Though a lot of bad news may already be priced in, we still think there could be further moves lower.
GLASS HALF FULL:
Buying biotech – the companies allowing us to live better and healthier lives.