Gervais Williams on what makes a good fund manager, dividing time and the differences between running unit trusts and investment companies
When I sat down to speak with Gervais Williams, senior executive director at Miton, at 4pm on a Monday, he had already completed five hours of company meetings, written manager reports for clients, made some deals on the stockmarket and engaged with clients. Being a fund manager is no easy task, but Williams says it is a “wonderful responsibility” to have. A fantastic industry, a “hugely stimulating” role and being able to make a difference to people’s lives are just a few examples he cites as why he loves his job so much.
Williams currently manages four funds at Miton – two open-ended and two closed-ended – aggregating just under £2bn – and his management career has spanned 30 years including 17 years at Gartmore where he was head of UK small companies. Small-caps are his forte, and he is a member of the Alternative Investment Market Advisory Council as well as being chairman of the Quoted Companies Alliance and a board member of the Investment Association. In addition, he has managed to find the time to write and publish three books on investing over the past eight years.
He manages his funds with Martin Turner, his co-manager, and while the team consists of four managers, he says they don’t employ a wide range of analysts. “We do not rely on others. We do all the work ourselves. We meet with a large number of companies face-to-face and get a real understanding of the risk and opportunities,” Williams says.
When asked whether he prefers managing unit trusts or investment trusts, he says it is all swings and roundabouts. “Different structures have different advantages. The unitised world is very immediate; people know the price they are going to buy and sell at, but on the other hand you get flows in and out which are unhelpful.”
A frustrating element, he says, is when he gets good ideas but then is hit with redemptions, forcing him to sell stocks, while at the other end of the spectrum when the market has a good run the fund suddenly sees huge inflows. “It is marvellous but sometimes I think ‘I wish it hadn’t come in today’,” he adds.
An advantage investment trusts have is that managers do not get large flows in and out of the fund and there is a longer duration.
Shareholders and boards are another element to trusts that their open-ended counterparts do not have to contend with.
Williams, however, says he engages often with clients and speaks to decision makers at wealth managers, advice firms and pension funds so it can feel similar to addressing board members.
He says: “The thing about the board is they bring together, as a body, a lot of continuity. There is real duration to that; it gives you a chance to talk to the board about the more unconventional ideas. It is more of a two-way conversation.”
Speaking with advisers is part of the day job for Williams. In 2012 he was the subject of out-of-context quotation in a national newspaper saying advisers are “expensive”. He was speaking about one small case of transferring some pension funds which became expensive.
Now, he says advisers are an important part of many life cycles. “If anything, I would argue the pattern of markets is changing now. The political agenda and the economic policies. It is really time to put your financial situation together and get a financial planner and think about where you are and where you are going,” he says.
“I was recently knocked out at how good some advice I got was. [The adviser] said ‘you can do all that but it is too complicated’. He ticked all my boxes. I am not bothered about having to pay tax, but I don’t want to be misunderstood on what I’ve got and find out it is different to what I expect. Sometimes you can make things too complicated.”
On what makes a good fund manager, Williams believes it is about keeping your feet on the ground. “What I hate in anyone is arrogance. It is all too easy. We are in a very fortunate position and it is too easy for anyone to think they are above it all,” he says.
“What is wonderful about this market is that it allows you to feel full of yourself, but then it slaps you down. Having been in the market since 1985 I have seen it all.”
Williams manages the Miton UK Multi-Cap Income, UK Smaller Companies funds and Miton UK MicroCap Trust and The Diverse Income Trust plcs.