Richard Buxton gives the impression of someone who is not afraid to speak out when things go wrong. The Old Mutual Global Investors chief executive has just completed a roadshow for his £2.2bn UK Alpha fund at a time when many other managers would struggle to stay positive on the financial landscape.
“It’s very important to be out and about, especially when the market is down. It is important not to hide,” he says.
Buxton is one of the few household name “star” managers in the UK fund industry, although it is not a title he likes. “You are always challenging your beliefs and your level of confidence in investment views but you have to know that you won’t get everything right all the time and you have to deal with that. In this job, you can get things wrong a third of the time but I don’t wake up at night and worry.
“The great thing is that you are always learning, which keeps you interested. There’s always something new in markets; something different.”
Back in university, where Buxton majored in English, his ideas on the future were not as clear and reassuring as his investment views today. “I was a bit envious of the people who knew what they wanted. After university, I went for a job interview in the City as I was fascinated by the stockmarket bits I had studied in my A levels in politics and economics. I ended up with a job offer at Brown Shipley, which at the time was a commercial bank, and I worked on its investment side.
“I learned on the job and got addicted to markets and companies. It is a privileged job to look after other people’s savings.”
In June 2013, Buxton’s move from Schroders to become OMGI head of UK equities made headlines in the investment world. He was promoted to chief executive in August 2015 to replace Julian Ide.
At Schroders he managed the UK Alpha Plus fund since its launch in 2002. Prior to life there Buxton ran the Barings UK Growth, Equity Income and Global Growth funds for a decade.
The OMGI UK Alpha fund is co-managed by Buxton, Ed Meier and Errol Francis, who both joined him from Schroders. During my meeting with the trio, Meier and Francis rush to see a client in the opposite room. But Buxton is free to spend another hour-and-a-half with me.
“People look at the glass half empty rather than half full. That is why you are seeing this sharp sell-off”
“I don’t need to be there. They’ll come out of that meeting and we’ll know the key points to discuss. I can be out of the office when news breaks and they would quickly decide how to act in terms of the portfolio. They don’t need to ring me up and ask for permission. I trust what they do and that is very special. I have known Errol for over 20 years working together and we live in the same road.”
While “stic
king to your people” is his mantra, Buxton admits it was a complete surprise to be asked to head up OMGI. Saying that, he repeats a few times throughout our meeting that there are “really eight of us running the firm”.
“It is a very collegiate business. For me the most important thing I have learned from meeting so many chief executives is having a great team around you and maintaining the culture is important. And that is palpable. We don’t want egos and politics.”
After six months in the role of chief executive, Buxton is focusing on investing in the business infrastructure and modernising the investment platform, as well as looking at new investment capabilities and asset classes.
“There is still a lot of demand for liquid alternatives so we’d like to do more there. Our Global Equity Absolute fund has been hugely successful so we want to do more on that systematic and style premia-type of product. European long/short is something we don’t have, so we are adding that capability too.”
When it comes to investment markets more specifically, Buxton recognises there is no euphoria at the moment.
“People look at the glass half empty rather than half full. That is why you are seeing this sharp sell-off. It is like a game of snakes and ladders. At the moment, all the ladders are very short and the snakes are really long, so you can grind upwards and then go down very slowly. That tells you there is still a lot of negative sentiment post-crisis so markets react very quickly on the downside.”
He also agrees the current markets situation has no precedents.
“The post-2008 world is very different. There are a number of things we’ve never seen before: interest rates not rising and bond yields as low as the
y are, which I don’t think is helpful anymore. In fact, it is now counterproductive because it undermines confidence in the financial system if you crash bond yields.”
However, he says the world does not need more aggressive stimulus and companies are in a much better place than five or six years ago.
Buxton always knew it was going to be a multi-year process to see a change, and he says that would be the same if the UK votes to leave the European Union.
“There is no precedent for a country leaving Europe, so there is no blueprint for how it will work. There will be extraordinary uncertainty, and it could well take years to leave.
“Sterling is clearly already weaker and that will not be helpful for many companies. In the short term this will not be good for investments in the UK. Everything will be put on hold not in a dissimilar way from the last year’s elections. I am not changing anything in the portfolio as a result of the referendum, although that is not to say we won’t think about a potential impact.”
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