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THE INVESTOR
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Matthew Stylianou
how they work – not just equity
markets but markets in general.You
need to read widely about what drives
markets and what makes a successful
fund manager, to have an interest in
business and what makes a successful
company. One of the exciting things
about being a fund manager is that
you quite quickly get to meet a lot
of very important people.You need to
have the con dence to do that, and the
ability to do the research so that you
can ask sensible questions in such a
forum.You need to have con dence in
your own ability and be able to explain
yourself to di erent audiences.
What are thechallenges
facing thenewgenerationof
fundmanagers?
Regulation now impinges on all areas
of nancial services and, as it becomes
more extreme, it will a ect behaviour.
Fund management is not a science,
but increasingly we are being asked to
justify all decisions, which I suspect
eventually will lead to fewer decisions
being made.The industry is also
becoming more professional. It used
to be possible to do the job without a
university degree. Now the majority
of companies recruit only graduates
with very good degrees from very
good universities. I can understand
why, but I have worked with some very
good fund managers who do not have
the quali cations that are now needed.
INTERVIEW
and ignore market noise is another key
skill for a fund manager.A piece of
news may seem very signi cant at the
time it is announced and can have an
immediate impact on a company’s
share price, but most of the daily news
has no impact on the long-term
prospects for the business.
Finally, never say never. Market
conditions can change and you should
be prepared to change your view
when that happens.
Howhas the investment
landscapechangedover thepast
30years?What impact has that
hadon thewayyoudoyour job?
Everything has become much more
global.I am a UK equity fund manager
and the companies I invest in are
mostly from the FTSEAll-Share
Index, but 70% of their earnings come
from overseas, so I increasingly need
to think about what is happening
overseas.The pace of technological
change is rapid. So many of today’s
giants – Uber, Facebook,Airbnb –
have come from nowhere in the past
10 years but are now very powerful,
but have completely di erent business
models. Uber is the world’s largest
taxi company but it does not own a
single cab; similarly Airbnb is a global
hotel business but it does not own
a room. Facebook is a giant media
company but it creates no content
of its own.
The structure of the fund
management industry is also changing,
with passive funds and hedge funds
increasing greatly.That is not
necessarily bad news for active
managers as it may perhaps give more
opportunity for them to add value.
Is the jobeasier or harder?
It has become harder – not that it
has ever been easy.The pace of
technological change has accelerated so
much in recent years, so businesses
which looked ne ve or 10 years ago
are no longer guaranteed to be there in
ve years. Liquidity is now signi cantly
worse than at any other time during my
career.The e ect of the nancial crisis
in 2008 is that the investment banks
and stockbrokers which used to make
markets and put their capital at risk are
no longer prepared to do so as
increased regulation, requiring more
capital to be set aside to support such
activity, has made that much more
expensive.There is also now much
more of a focus on short-term
performance, which can be unhelpful
for investors and fund managers.
What doyou thinkare the
keyattributesneeded tobea
successful fundmanager?
Numeracy – although you do not need
to have a PhD in maths, you do need
to have a basic level of maths skills.You
also need an interest in markets and
Run with your winners. That is especially
important if you are investing in small
companies as they find it easier to grow