Burns Night, the annual celebration of the life and work of Scotland’s national poet Robert Burns, was a fortnight ago writes Eleanor Mahmoud. Unable to travel to Scotland, I took up the alternative of meeting a Scotsman in London, namely James Burns from Smith & Williamson.
I’ll leave you to decide whether it was fluke or fate that I met someone with the surname Burns on this particular week or not.
I met Smith & Williamson’s co-head of managed portfolio services at The Tokenhouse pub in Moorgate. With an unmistakable strong attention to detail, he quickly informs the waiter that there should not be an apostrophe in the word ‘Burns’ on the special lunch menu.
Burns may be protective of his national poet’s surname, but actually left his hometown of Edinburgh in 1998 to move to London. He kicked off his career at NCL Investments, which later merged with Smith & Williamson.
‘The first task during my first three months at NCL Investments was on a Y2K disaster recovery project,’ Burns says as we order drinks – soft drinks to begin with, followed by some wine.
Starting a career in investment management as we approached the millennium was evidently a remarkable time for Burns.
‘I watched the market going mad right at the beginning of my career,’ Burns recollects. ‘We were approaching the millennium and people thought that planes would fall out of the sky when the clock turned midnight!’
Thankfully we now know those planes remained in flight. We were also thankful it was now time to order lunch – Burns decides on a classic fish and chips, while I opt for a wild boar ragu.
His 20-year anniversary at Smith & Williamson approaching, Burns has certainly picked up a thing or two over his career. Back in January 2001, he moved to the investment trust desk, the area he has gone on to specialise in.
‘Investment companies are my area of expertise. It’s a big part of what we do at Smith & Williamson,’ he explains.
‘We have had investment companies in our managed portfolio service since the day we launched it. We wanted to give as typical a Smith & Williamson service as we could to a broader range of clients.’
As we dig into our lunch, we discuss the composition of these portfolios. Their lower risk portfolios have a smaller proportion of investment companies in them, whereas higher risk portfolios go to 30% thanks to a relatively higher emerging market and Asia weighting.
‘The lowest ones have a much higher passive and fixed income weighting; there’s not many investment companies in those spaces,’ Burns says.
I’m also keen to get a better understanding of how the investment company sector has developed since Burns has been working with them.
‘Pre-financial crisis, equities dominated the investment companies universe. Since then, there has been a massive boost in other areas – think infrastructure, specialist credit and renewables.’
Why is this, I ask?
‘Many asset classes that had previously been the sole preserve of the banks became available as banks shrunk their balance sheets. The investment companies sector now stands at around £170 billion and about 45% of it is non-equity,’ Burns says.
The sector has clearly expanded rapidly, but I wonder what other changes Burns has seen in his time in the industry. ‘Over time, investment companies have developed,’ he concludes. ‘Many boards have become more independent and have driven a harder bargain on fees with their investment managers since the introduction of the retail distribution review.’
Get in touch with Eleanor (email@example.com) if you'd like to pop out for lunch at your local pub.