Money Maze Podcast

Sign up to our newsletter for more in-depth insights | Follow us on LinkedIn The combination of trust, experience, neutrality and secrecy were the foundations of Switzerland’s reputation as a centre for private banking, and despite globalisation, regulation, and competition from all quarters, Swiss financial institutions have maintained their position of influence, with three Swiss firms in the top ten of global wealth managers. To help explore this landscape, we welcome one of these top ten firms, and the CEO of its UK business, David Durlacher. David discusses how wealthy clients have very different goals from earlier periods, their changing priorities, how Julius Baer manages the challenge of serving different international markets, and the contrasting styles of those clients. He discusses the debate in families between selling versus retaining a family business, why a client might seek out Julius Baer as its chosen partner, and how they differentiate themselves within a crowded field. He covers the lending component of their business, why they seek to be a “sparring partner” for their clients, and why the UK represents a compelling growth opportunity for their business. Finally, in an unusual exchange, Davis discusses the role religion plays in framing his thinking about investing and the future.

Sign up to our newsletter for more in-depth insights | Follow us on LinkedIn   Gavyn Davies has more on his CV than most can imagine. In his varied career, he’s been advisor to the Labour government of Jim Callaghan, the Chief Economist at Goldman Sachs, Chair of the BBC, founder of Active Private Equity, and now Chairman of Fulcrum Asset Management. He’s also an active writer for the FT and Guardian. Gavyn starts by describing his early work as an economic advisor to the Labour governments of 1974-79, the inflation challenges they faced, and remedies implemented. He describes the emergence of Goldman Sachs on the international stage, the evolution of macro thinking, and serving as one of the “wise men” for two UK Chancellors. He then describes the challenge and opportunity for the BBC, the subsequent decision to launch Fulcrum Asset Management and their more defensive approach to managing capital. In particular, he discusses the rationale for allocating to hedge funds - and other assets - but why lower returns should be expected. Gavyn then compares the inflationary headwinds of the 1970/80s with today, why the Fed’s response is needed and should be taken seriously, fiscal policy and the withdrawal of the turbo-charged COVID responses, and which currencies he prefers. He goes on to discuss the challenges of excessive flows into the world of private equity, the attributes he looks for in allocating capital to venture PE and then in a series of rapid fire questions, he reveals his views on golf, the next PM, education, and why he loves to come to work on the London buses.

Sign up to our newsletter for more in-depth insights | Follow us on LinkedIn Hamish Baillie, long term Partner and Investment Director at Ruffer, which is listed on the London Stock Exchange, joins the Money Maze Podcast to discuss their unbenchmarked, differentiated approach to managing portfolios. Hamish explains that over the 26 years since inception, by following their key investment principles, annualised returns have compounded at 9%, with a low level of volatility. Hamish observes that “our clients have typically made money in good markets and been sheltered from market crises”. He explains their desire to build the portfolio with less correlated assets, why capital preservation is at the forefront of their approach and why their portfolios look very different from many others. The discussion drills down into inflation threats and the assets deployed to mitigate that reality, why Ruffer believes the storm clouds are gathering and how “markets will grind lower and lower, punctuated by rallies of prodigious strength”. Finally there a discussion on the merits of gold, why Ruffer has been investing in oil equities, and an explanation of their large overweight to UK index linked debt and equity.

Sign up to our newsletter for more in-depth insights | Follow us on LinkedIn Today we turn to music as an investment theme, and our guest has worked with the greats, from Elton John to Beyonce, and has been in the front row of the music business for nearly 40 years. He is CEO of Hipgnosis Songs Fund Ltd, a FTSE 250 company and the first UK investment company offering a pure play exposure to songs and music IP. Music and back catalogues have seen growing investor interest and a number of vehicles have, and are being developed to offer investors access to long duration income streams, often via listed entities. Merck talks about growing up in Canada, making it to his first Kiss concert, working for Simon Draper and Richard Branson at Virgin records, before spending nearly 2 decades at Sanctuary music, where his client list featured some of the great musicians of all time. He talks about the changing nature of the music business, from the Bowie Bonds to the astonishing development that today over 90 % of US households have a music streaming subscription. From a discretionary purchase to a utility within a decade! Merck explains the current economics of the revenue splits, and why he believes that the artists have often not received a fair deal. He explains how a $12 monthly music subscription is split. He then details how Hipgnosis has acquired 57,000 songs and spent £1.2bn since listing on the London Stock Exchange three years ago, and why buying the highest quality catalogues of proven songs generates current and new revenue opportunities through song management. He talks about the rights once the catalogues are owned that endure 70 years after the artist’s death and whose revenues can accrue to investors. Equally he explains how owning the song allows you to take as an example, Blondie’s Heart of Glass and not just license it to TikTok, but reinvent it with current artists like Miley Cyrus. Merck talks about song selection, helping insert songs into movies and commercials, maximising song potential and how technology is changing the music business.  He explains why London was chosen for the listing, reflects on some of the greats with whom he has worked and concludes that the new world of music makes it compelling for investing and for job prospects. And the show closes with the great line….“If you got the money honey, I got the time, and when you run out of money honey I run out of time”. Originally released in April 2021, we're pleased to be featuring Merck's episode again in light of today's inflationary environment, which has resulted in many investors looking to the world of alternative assets to mitigate their risks and capitalise on fast-growing markets. In October 2021, the firm enjoyed a $1 billion cash injection from Blackstone, who also took a stake in the business.

Sign up to our newsletter for more in-depth insights | Follow us on LinkedIn In this conversation, Vulcan’s C.T. Fitzpatrick explains the skills he acquired during 17 years at South Eastern Asset Management before founding Vulcan Value Partners in 2007. Today the firm manages approximately $20 billion, with a team of 64, all based in Birmingham, Alabama. He explains his approach to identifying and defining “high quality businesses”, the margin of safety he seeks, the goal of avoiding permanent capital loss and the investment similarities and differences with Warren Buffett. He talks about constructing a portfolio of between 20-40 companies and the moat he requires in his investment companies. He discusses his aversion to the wrong types of corporate debt, why he avoids macro judgements, the importance of temperament and discipline in investing, and why he is optimistic about the investment opportunities in his universe.

Sign up to our newsletter for more in-depth insights | Follow us on LinkedIn In today’s conversation Luba Nikulina talks about an upbringing that began in Lithuania, then part of the USSR, and her route to joining Willis Towers Watson (WTW), the leading global advisory firm with 45,000 employees globally, and where she has spent the last 17 years. The discussion begins with WTW’s investment approach,  a perspective on how strategic and tactical asset allocation have evolved and why Luba believes it is increasingly helpful to think more in terms of allocating risks, than portfolio construction via the rear-view mirror. She explains why she feels strongly in the case for more active and less passive, smart beta, the Net Zero Asset Managers Initiative, the process around identifying and selecting managers, and their increasing focus and preference for a team as opposed to star manager approach when selecting investment managers to partner with. She talks about why it is increasingly accepted that investors should not allow the use of external carbon offsets as a significant long-term strategy for decarbonisation, the relevance of neurodiversity, and her perspectives on the future landscape of the investment management industry. Finally she makes the recommendation that senior employees and corporate leaders should think about the value of taking a non-executive position whilst they still are fully engaged in their job instead of waiting until they leave.

Sign up to our newsletter for more in-depth insights | Follow us on LinkedIn In a first for the Money Maze Podcast, this episode brings together the perspectives of 3 China experts to discuss the economy, public equities and private assets.  The three guests are Chingxiao Shao, CEO of Red Gate Asset Management, Ron Cao, Founder & Managing Partner of Sky9 Capital, and Chi Lo, Senior Economist at BNP Paribas. The objective in this podcast is to explore the investment opportunities available in public and private markets after a year in which rising political tensions and government interventions have brought about a sharp bear market.  The conversation begins with a review in which it is clear that the Chinese central bank has not resorted to debt monetisation on the scale of the Fed, whilst China still enjoys huge trade surpluses, unlike the US with its large deficits. We discuss the implications of this for Chinese fixed income products and the currency.  We then move to questions about the importance of the private sector to the Chinese economy and examine whether new regulations which have led to sharp declines in headline names and sectors suggest anything more insidious. From there, Ching discusses the opportunities in public equities, Ron covers VC and Chi provides context and warns of the dangers of viewing Chinese assets through an exclusively Western lens. The discussion reviews the very large buybacks seen in Hong Kong by many corporates and their owners, the valuations and opportunities, as well as fault lines and red lines that Ron, Ching and Chi believe are important. Finally, we discuss whether Chinese assets may actually offer country diversification, given their evolution and the different current monetary stance.

Sign up to our newsletter for more in-depth insights | Follow us on LinkedIn Our latest guest has been described as one of the ‘World’s Top 50 Thinkers’, is a Sunday Times bestselling author for his epic work ‘Silk Roads: A New History of the World’, is responsible for the prophetic article in December 2019 where he predicted a pandemic’s likely arrival, and has managed all this around his day job as the Professor of Global History at Oxford University. In this fast-paced, far-reaching conversation, Peter demonstrates his terrific understanding of both the past and present, offering his perspectives about the future of our world. The discussion begins with his reflections on this pandemic, then moves to what we can learn from looking at the world’s changing order through a wider lens. He weighs the competing forces of a rising China, the West jockeying for position, the continuing role of religion and Russia’s dealing with “a weak hand”. He offers his perspective and some optimism in light the abundant worries of military conflict in Taiwan, as well as the ongoing China/US spats. He also speaks about the role of education in driving growth, and where he believes some of the more compelling investment opportunities lie. Finally Peter offers some great advice to us all about learning and the necessity of grit!

Sign up to our newsletter for more in-depth insights | Follow us on LinkedIn In an industry where size is often a boast, there are few powerhouses with great credentials and a low profile. Founded in the US in 1973, Cambridge Associates (CA) was established to provide investment research and advice to a group of major US university endowments. Fifty years later, with over $550 billion of assets under advisement and 11 offices around the world, CA helps its investors customise portfolios.  In this conversation, Annachiara Marcandalli, CA’s European Head of Sustainability and Impact Investing, as well as Partner at the firm, addresses their approach to customising portfolios. She explains why it’s their belief that successful investing is incremental, not transformational. She discusses their search to identify managers’ economic incentives and alignment, before addressing the style drift, and why value and growth may cease to be relevant terms in the future. She speaks of the challenge presented by the rush into impact and sustainable investing - separating the “surfers” from the “serious” - and why ESG engagement matters. Finally she speaks of liquidity around private assets, how they address crypto investing and the dangers of excessive reliance on financial modelling (as opposed to building resilience into portfolio construction).

Sign up to our newsletter for more in-depth insights | Follow us on LinkedIn Some of the most successful companies financed via venture capital are now household names - Facebook, Uber, Twitter, Airbnb, & PayPal. Venture capital has moved from niche to mainstream for institutional investors, and in Q2 2021 alone VC investment hit a new record high of $157.1 billion. In today’s conversation we are delighted to welcome Hunter Somerville, VC heavyweight, formerly General Partner at Greenspring, and now post-merger, Partner at Stepstone. In this episode Hunter describes his career to date and his world of venture capital & growth equity. He describes the wider adoption of venture capital as an asset class, how allocations are increasing and the nature of long term returns. He describes his key responsibilities, which involve sourcing venture funds of all stages, examining early and growth stage companies, as well as finding secondary opportunities. He then explains why companies are staying private for much longer than in previous decades, StepStone’s competitive advantage, geographic and sector preferences, valuations, risks and opportunities in the sector.  Finally, Hunter comments on the characteristics they seek in their venture capital managers, why length of relationships is a key competitive advantage and why the surge in VC investing is unlikely to prove a passing phenomenon. Sign up to our newsletter and never miss a release! | Visit our website | Follow us on LinkedIn | Follow us on Twitter