13 Questions for Majedie’s Tom Record


In this series of short profiles, we ask leading fund managers to defend their investment strategies, reveal their views on cryptocurrency, and tell us what they’d never buy.

This time our interviewee is Tom Record, co-manager of the LF Majedie Global Equity Fund, which has a Morningstar Quantitative Rating of Bronze.

Which Sector Provides The Biggest Opportunities in 2022?

Twelve months is shorter than our usual investment horizon, but what stands out to me now is that the market has split between a handful of giant, loved stocks and a broad swath of individual names that are very reasonably priced for attractive growth. From China tech to US biotech, we are seeing pockets where valuations are set up to give us a great skew of returns over the coming years.

What’s The Biggest Economic Risk Today?

I prefer to think of economics as the big macro trends. As stock pickers, we often identify beneficiaries as well as risks. The market is currently obsessed with inflation and Fed tightening, but I feel that the longer term risks of regulation and politics are more challenging. One of the reasons for this is that the political aspect means that regulation is often designed in a way that may not be effective or particularly logical and so can be broad in outcome and difficult to predict.

Describe Your Investment Strategy

We are fundamental, long term, active, high conviction investors. We have a range of styles within the team that ensures we capture a broad range of stocks and sources of return – from value to growth in varied sectors in emerging and developed markets. We back our analytical skills and look for stocks where there is change and uncertainty, that allows our analysis to differentiate our views and give us a skew of potential returns to the upside.

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Which Famous Investor Do You Admire?

I’m going to bit out there and choose David Attenborough. If you read his autobiography “Life on Air”, you’ll see that it shows lots of the skills a good fund manager needs – curiosity, flexibility, managing a team, emotional sensitivity, discovery and he has a wonderful way of explaining what’s happening . He’s also principled and uses his celebrity de el to enact important change in elements like plastic in the ocean and the transition from fossil fuels.

Name Your Favorite “Forever Stock”

Naspers – A stake in China’s mobile Internet (Tencent) and a great VC in private companies in emerging market media, education, and ecommerce markets that trades at less than half the value of its stakes.

What Would You Never Invest In?

A declining business that’s only attraction is that it’s ‘cheap’. It would be different if we could identify a catalyst for why it would improve, but buying a stock only for the valuation to ‘revert to mean’ lacks the analytical rigor that I need to hold an investment well.

Growth or Value?

Primarily growth for me, with a smattering of contrarian value, but some of the other fund managers would say primarily value for them. We’re a broad church and believe that there are great value and growth investors.

House or Pension?

If you’re young – a pension. Compounding is important and its impact is almost always underestimated, and transaction costs for housing when you’re young and mobile are excessive. If you’re older then it’s more of a balance.

Crypto: Brilliant or Bad?

Blockchain creates scarcity on the web, which is potentially very valuable. I am more excited by other blockchain uses, such as smart contracts and NFTs, than cryptocurrencies.

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What Can Be Done to Increase Diversity in Fund Management?

Our focus should be on the beginning of the process to build out the long-term talent pipeline. For example, we ran a competition (Next Generation Investor) for teams of women at university to ‘invest’ a nominal sum. We mentored the finalists and gave them guidance and insight into our industry and have seen a number of contestants successfully get roles in the industry.

Have You Ever Engaged With a Company and Been Particularly Proud (or Disappointed) in the Outcome?

We’ve engaged with AP Moller Maersk, the world-leading container shipping business for years on their carbon dioxide emissions. They are a big emitter, but are among the most efficient in their peer group and shipping is much less carbon intensive than alternative transports (rail, truck, flight). We’ve pushed them on looking at alternative fuels and they recently announced that their new ships will run on renewable methanol. The company has improved its net zero target date and intermediate targets, and we’ve seen industry journals suggesting that Maersk’s actions may force the IMO (International Maritime Organisation) to accelerate the timing of industry regulation for the net zero transition.

What’s The Best Bit of Advice You’ve Ever Been Given?

Be honest with yourself and when investing try to think of your decisions from the perspective of looking back at yourself now from three years’ time. It’s great for ensuring a better perspective.

What Would You Be if You Weren’t a Fund Manager?

I would probably be a research scientist in biotech. I love getting into the nitty gritty of what makes things tick and the systems in cells and bodies are immensely complicated and variable – a real challenge to understand.

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George Holan

George Holan is chief editor at Plainsmen Post and has articles published in many notable publications in the last decade.

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