Never has a research trip had so much discussion – two and a half years to be exact – before myself and Scott Spencer finally conducted our ‘site visit’ to United States. The world has changed dramatically since we first began planning. Flexible working, the great COVID-induced technology shift and everybody using Teams or Zoom as a verb.
How are things on the West Coast?
We began in San Francisco, and the home of the great technology disruptors, that now dominate in many industries. From our taxi window, we noticed the large biotech buildings, perhaps the next stage of American exceptionalism, before we entered the still reasonably, if not eerily, quiet streets of San Francisco. Had we come a little too early? That fear quickly diminished once the San Francisco Bay Area Arsenal FC Supporters Club turned up in force to our local Irish bar.
We often find the softer socialising with managers, over a drink or bite to eat, to be as revealing as the structured meeting itself and the two boutique managers, Spyglass Capital and Snyder Capital, we met in San Francisco were no different. Meeting at their offices gives a chance to meet analysts and researchers, who are just as critical as the named Portfolio Managers when it comes to investment performance. How can you really understand a firm’s culture without feet on the ground? It’s impossible to glean these insights online.
Colorado – clear skies and simple investing
We left the driverless cars (yes, it’s happening) behind us and flew onto the very fresh air of Denver, Colorado. Less Teslas but more Ford F-150 pickups. We met with another recently launched investment boutique NZS Capital; a group who codified their investment process in 2014 in a document called ‘Complexity Investing’, an oxymoron when their investment style is quite simple. Focus on businesses whose cash flows are resilient and who continue to invest (creating optionality) to keep them resilient. When simple works it’s a powerful concept.
Meeting new colleagues
Next stop was Boston to meet our new Columbia Threadneedle colleagues from various investment teams, all of which were high calibre and dedicated individuals. Although we are hoping our slightly late arrival after an accident when travelling in an Uber hasn’t left a bad impression. We finished the day with a meeting with Barings Emerging Markets Debt, particularly timely given the crisis in Ukraine and its fierce financial impact.
New York - so good we heard it more than twice
Last up was New York, where the St Patrick’s day parade was in full swing, which would have been fun had we not had five back-to-back meetings, in different locations, across the city. Credit to Kelly Ross of Round Hill Music Song Royalty for keeping straight faced as Auld Lang Syne was belted out on Park Avenue from New York’s not-at-all-authentic ‘Celtic’ band. I wonder if they can buy the royalties to that track, as we heard it multiple times through the day.
We zig-zagged from Lyrical Asset Management, to Strategas Research Partners where a lunch briefing included an individual who featured in The Big Short – a prompt reminder of what can happen after periods of equity market euphoria. Then onto Edgewood Capital Management, large winners in this great S&P bull market, and CIFC, a structured credit manager, whom we were keeping from their office pizza party.
Our final day included just one stop at Pzena Investment Management, where we recorded a podcast with founder and statesman of value investing, Richard Pzena – it’ll be dropping on iTunes soon so keep your eyes and ears peeled. NYC’s Hudson Yard, a redeveloped area of the West Side of Midtown Manhattan, has sprung up since we were last in town and is testament to how sustainable infrastructure can be built; the views are spectacular, and we spotted a few asset managers were already moving in. It’ll be on our itinerary next time we’re in town.
In total we met with fourteen fund managers, fourteen analysts, two strategists and a CEO, across seven funds we own and three interesting new ideas. It was clear that for many we were their first in-person meetings for a long time. From both sides of the meeting (or restaurant) table it was a healthy reminder that Zoom truly is a lousy alternative to meeting our managers in the flesh. It’s a people business even if, thanks to a bumpy Uber ride, we were worryingly close to activating our health insurance policy for our troubles.
