(Pictured above, Charles Nicholson)
Despite joking that he doesn’t have much of an accent, Charles Nicholson, head of Charles Nicholson Asset Management, tells me that he is immensely proud to be from the North East (a feeling I know well), writes Alex Foster. I ventured back to our home turf to have lunch at The Badger, just as a typically cataclysmic downpour hammered us upon arrival. What’s not to love?
Sitting down to fish and chips and a chicken and mushroom pie, Nicholson (pictured) explains that he hasn’t always been located here.
‘I have always had an interest in finance – even from a young age I was intrigued by money and the concept of it, and hence I studied politics and economics in London and Grenoble,’ he says. ‘This led me to internships following university – I spent time at Jupiter Unit Trust and Perpetual in the 1990s.’
‘I got to shadow some very influential and prominent fund managers and absorb the nuances of their key styles and approaches in reacting to the markets,’ he continues. ‘This had a significant impact on my style of investing – particularly on the equity income side of things – and it gave me a great entrance into a diverse set of groups.’
But before too long, he found himself returning back up north.
‘My father had a law firm with an investment division and I joined him there. We developed the private client investment management arm,’ which formalised into its own separate entity in 2001,’ he explains.
‘It was brilliant for me because it was full on – I loved being involved with the client facing element, while also getting involved with the technical investment side, too.’
By 2012, the firm had merged with Sanlam, and Nicholson became head of the Newcastle office. However, he left Sanlam in 2016 to set up and run his own independent practice, operating as a branch of Raymond James but trading as Charles Nicholson Asset Management. Though he believes Raymond James made the transition for him simple and smooth, it didn’t come without issues.
‘When I opened, people were interested in a new and independent DFM business, but it did come with its challenges – I had to juggle everything from clients and investments to marketing,’ he remarks. ‘You have more flexibility with your own business, but equally you can never really switch off.’
Despite this, the freedom of owning your own company is a real blessing to Nicholson, especially when it comes to the nitty-gritty of investment selection. It’s here that he breaks down his approach to how he positions his portfolios on what he sees in the global market.
‘In my portfolios, I don’t stick to only pure value or pure growth, but I do have more of an emphasis on value,’ he says. ‘People talk about how strong the market has been and when this will eventually fall off, but the compounding of income is a proven investing philosophy and there are areas of global markets that look attractive at the moment in a value sense.’
‘In the UK, there are lots of value stocks being left behind. Japan is interesting on a price-to-book value, and even parts of the US
market that haven’t been immediately swept up by the huge rise in stocks, such as Amazon, are there for the picking.’
Going into the next few years, Nicholson says it’s about staying ahead of the game.
‘I feel there is going to be a significant correction at some point in some of these growth areas – if the markets fall, value investing will become more popular.’
Though he is very likely correct, we are drawn to the pounding rain on the window as the bill arrives, reminded that, at least in our neck of the woods, some things never seem to change.
GLASS HALF FULL:
‘Although equity markets have been strong over recent years, many stocks have not participated in this rise and are now trading on some compelling valuations.’
GLASS HALF EMPTY:
‘Markets on the whole are extended and could suffer a significant correction should growth slow during a contracting monetary policy environment.’