Author: Julian Marshall
The recent improvement in performance at Phillips & Drew will provoke mixed reactions in Tony Dye, according to those who know him best.
“It’s sort of ironic really,” says a former member of his team. “We often used to say that him leaving the firm would coincide with the change in the markets and sure enough that’s what has happened.”
Despite firm denials by his UBS bosses that Dye was eased out of his seat, the source says he is unlikely to have left his post willingly. “Was he pushed? I don’t know but he isn’t the sort of person who would want to leave. He wouldn’t want to go before he was ready, which would have meant when things had started to turn round. He would want to have been proved right.”
However Crispian Collins, chairman of Phillips & Drew, says Dye, like Gary Brinson, recognised it was time to go.
“Tony did a great job for us, as did Gary for Brinson in Chicago, but it’s important to remember that the team that is moving forward is the team that they chose,” says Collins.
“I can’t speak for Gary but Tony recognised there was a time when he would need to move on to give opportunities for others to come through and this [the merger of Phillips & Drew and Brinson] seemed like a very good opportunity.”
Collins says the firm wanted to create a role for Dye in the new operation away from the coal face. “We would have quite liked to have him stay on in a senior role but he recognised and we recognised that he likes to be in the front seat rather than the middle seat so that’s what he chose to do.”
Dye, for his part, does not want to discuss his departure from the firm where he had worked for more than 20 years. A bluff Lancastrian used to straight talking, he is said to be considering his options and there are rumours that he is contemplating launching a hedge fund.
Some sources say his canny investment touch has left him wealthy enough not to have to work again while others say he suffered personal losses in recent years that mean he will not yet be ready to put his feet up.
Those who know him say he will not have lost his appetite for the battle.
“He has become known for calling markets but really he was a stock picker and he could be brilliant at that,” says a former colleague. “If he ever gave you a name then you invested in it. He used to take big personal positions and he made a lot of money for himself. Right from the early days.”
It will be interesting to see how the investment team continues without him. Dye was known for running a tight ship. “He ran the team pretty firmly and if he didn’t like a stock idea you came up with he would make it pretty clear,” says an ex-colleague. “He calls a spade a spade and he would tell you if he thought your idea was rubbish. Equally, though, he was fair because if he liked an idea you had he would defend you to the end.”
Certainly Dye lives for the stock markets. “He never switches off,” says a former colleague. “You could imagine him waking up in the middle of the night having just thought of something and having to tell someone.”
While his judgement was considered faultless at the end of the 1980s and early 1990s, as the markets started to move against Dye, he started to take things personally. As the markets went ever higher, his own position became more strident and it was around this time that the soubriquet “Dr Doom” came into being.
“The Dr Doom idea started out because he was becoming quite moody about what was happening,” recalls a former member of his team. “The US would have moved up again and he would be grumbling and saying it was overvalued. You could feel his presence when he walked into a room. Suddenly he would be standing beside you, complaining about what was happening.”
At this stage, in early 1998, Dye wrote an article in The Sunday Telegraph arguing that the world markets correction which he was predicting was not happening because the US authorities had secretly intervened to prevent it.
“You will forgive me, as one of the better known bears around, for not joining in the unbridled joy that has accompanied the new highs in equity markets,” he wrote. “But – my own position apart – we are entitled to ask whether the perceived lack of any risks in equities has arisen because of natural market forces, or whether other agents have been at work. More specifically, I question whether the western financial authorities have secretly intervened to ensure that equity markets have not fallen rapidly.”
This was a turning point, according to one former colleague. “By the time he wrote that article I think he had started to lose it,” he says. “People did see him as sitting up in his ivory tower insisting that he was right and everybody else was wrong.”
Having called his big bet right in 1987, he had become convinced that he was right all the time, argues this ex-member of his team.
Another ex-colleague agrees with this view that Dye showed a stubborn streak. “He went bearish too soon, around 1994,” he says. “I had conversations with him where he argued that the markets would come down.” He adds that this was at the heart of Phillips & Drew’s problems. “They made two big mistakes: they went bearish too soon and they wouldn’t change when things went against them. They were inflexible,” he says.
