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?We’ve doubled our assets this year and it’s conceivable that we could double assets again by the end of the year? |
Sandy Nairn loves a good challenge. After 10 years at Templeton Investment Management he took on the task of reviving Scottish Widows Investment Partnership, Lloyds TSB’s languishing Edinburgh-based investment business in November 2000.
Now, along with several former colleagues, he’s nurturing a new boutique fund management business called Edinburgh Partners.
If that weren’t enough to keep him busy, he has three small children, has written one book and has started on a second.
Nairn left his role as CIO of SWIP in March 2003. In little more than two years he had taken its performance from the fourth quartile to the first quartile.
?I was approached by SWIP to create a world-class global asset management business in late 2000,? he says. At that time, the business included some of wealth management firm Hill Samuel, and Scottish Widows’ life funds and its remaining pension business.
?Performance in equities was generally very poor. It needed radical change to correct it,? says Nairn. ?There was a dramatic turnround in performance over the three-year period from making sensible, straightforward investment decisions.?
Then Nairn decided it was time to move on.
He is very careful how he phrases his reasons for leaving. Obviously he was unhappy and a number of his colleagues joined him when he resigned. ?Things hadn’t developed along the lines that I’d hoped,? is all he will commit himself to.
However suggestions that he was not content working in a large firm are unfounded given that he spent 10 years at Franklin Templeton which had more than $100 billion in assets under management by the end of the 1990s.
Because he didn’t already have a full plate during his time at Templeton, Nairn also managed to turn out a book in his spare time. He wrote Engines that Move Markets: Technology Investing from Railroads to the Internet and Beyond in 1999 and the book was published in 2001. ?The background was developments in the TMT sector,? says Nairn. ?Was it the new Industrial Revolution?? He looked into the Industrial Revolution to see what parallels he could draw.
Nairn is now working on a book about the founder of his former firm, Templeton. ?My publisher said: ?There’s a lot on Warren Buffett but no investment works on [Sir] John Templeton’,? says Nairn. Sir John has given his blessing to the project.
Nairn’s new business, Edinburgh Partners, received FSA approval in April 2003. The firm has nine partners: seven investment partners, a legal partner and a finance partner. All seven of the investment partners joined the new business from SWIP and have equity holdings in the firm.
These include Graham Campbell, the ex-head of retail funds and Bob Forrest who was brought into SWIP by Nairn to assist him in transforming the research and portfolio management processes. However, Nairn is eager to insist: ?We’re not the investment team from SWIP. We turned around the business at SWIP but we all grew up elsewhere.? Several of the partners previously worked together at Templeton.
In December last year the newly founded firm launched its first fund. The global investment trust called EP Global Opportunities raised just under £22 million ($39 million). Nairn explains that, although this is not particularly large, difficult market conditions meant ?it was the biggest equity investment trust launched last year?. The net asset value for this fund is up around 6%. According to Cazenove’s rankings, EP Global Opportunities fund is the second best performing global investment trust in the six months to August 23.
The firm has subsequently launched Dublin-listed OEICs focusing on the UK, Europe, Japan and global investments. These funds reached £20 million at the end of August, taking the total size of assets under management at Edinburgh Partners to around £50 million. ?We’ve doubled our assets this year and it’s perfectly conceivable that we could double assets again by the end of the year,? says Nairn.
Edinburgh Partners can survive for three years with minimal revenues and even longer without reaching profitability. ?The position now is that we’re way under costs and up on revenues.? He adds: ?We have facilities to draw more capital if necessary.?
Looking down the road, Nairn does envisage the firm becoming a large asset management business but says: ?I don’t see it having hundreds of employees.? When he was at Templeton there were a small number of people managing around $30 billion in assets.
So the aim of the firm? ?We want to be enjoying ourselves and we can’t do that if we’re not outperforming. If we produce good results it will lead to gaining more clients,? says Nairn.
