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Nick Sheridan

The manager of the New Star European values fund tells how he made a life-changing decision to take on the role but how the contrasting styles of the European team will drive the fund forward. He talks to Chris Salih about his method of stock selection which he has developed over the years

The decision to move to New Star to manage its European values fund has been a life-changing one for Nick Sheridan. The ex-Tilney stalwart, a true Liverpudlian, has never had an extended spell in the capital. All that has changed as he embarks on his new role at one of the highest-profile asset management firms in the UK.

Sheridan joined New Star last month as the latest edition to its European offering, which also includes the likes of Richard Pease and Dan White, following the firms’ acquisition of £172m-worth of Tilney assets in April. His fund has since been renamed from European growth to New Star European values.

Unlike so many of his peers, Sheridan’s road into the financial services industry was quite a straightforward one, as he believes that there is a natural affiliation to finance running through his family.

He says: “My father was a bank manager and like him I had took an early interest in numbers. I started off looking at accountancy but I quickly became bored of the idea of knowing what you had to do on a day-to-day basis before you even entered the office. Fund management is the opposite, anything can come up and each day can be completely different.

“I have always liked the idea of running money. There is nothing wrong with being an analyst. It’s a good job. But if you run money and you do it well, you will get noticed by a broader audience, particularly on the retail side.”

Following his graduation from Liverpool University, Sheridan started his 20-year career in the investment industry cutting his teeth at the likes of Ashton Tod McLaren as a research analyst and Wise Speke as senior account manager.

He then moved to Rensburg to work on the UK desk before joining Tilney in December 2001 to specialise in managing European money. By the time New Star came in to purchase the fund and the manager, Sheridan had become one of the shining lights in the sector, having produced top-quartile per-formance over one, three and five years in the IMA European ex-UK sector.

A large-cap specialist, Sheridan attributes much of his success to his modelling tool, which he has been developing over several years to help him identify companies with above-average prospects for capital growth in a rising market, or capital preservation in a falling market, while removing sentiment from the stock selection process.

“Over the long term stocks follow a logical path, it’s in the short term that they get mispriced for a number of reasons that lead to people making a series of snap judgements that they can ultimately regret as there can often be a misinterpretation of the information.”

Sheridan looks for three fundamentals in his stock selection – asset value, current earnings and value of growth in opportunities.

He says: “The aim is to find those companies that have the greatest unrealised value according to the model. It is a quantative-based approach, with a stringent process of selecting the 40 to 50 stocks that comprise the portfolio.

“It is my process and I do have the ability to override it should I find an anomaly in the system that I want to check out, for example, an accounting error I have spotted through my knowledge in that area. But that has only happened once or twice in the past few years. One thing it does mean is that I don’t go and visit companies as often as others, as my process tells me what I already need to know.”

Then came the move to New Star, a move that Sheridan relished from the moment he spoke to the company.

He says: “If you look at New Star, it is an attractive company, with dedicated performance. From my perspective, I had to look and say ‘is this a house I want to invest in?’ and the answer is a resounding yes.”

Sheridan admits that getting his family to move to the big city has had its difficulties.

“There was a degree of persuasion or should I say bribery. My wife was happy as she has some family in the south while we both had a number of friends who have gravitated to London over the years. It’s the children that have made me make promises of gerbils and hamsters to get them to move. However, I draw the line with ponies.”

Sheridan has been commuting from Milton Keynes since he took up the new role in early July although he hopes to be settled down in the Reigate area this month.

“It’s difficult as I have had to move the whole package. Selling the property, finding new schools for the children, moving the furniture and the dog.”

While Sheridan has many good memories of his past two decades in the investment industry, his worst day dates back to the 1987 crash right at the start of his career.

He says: “I can remember it like yesterday. I went out of the office for half an hour just to get some fresh air and when I came back the market was down 100 points and the rest is history.”

Those days are firmly in the past now and Sheridan is upbeat about what the future holds.

He says: “I’m enjoying my role on the European team and the fact that myself, Richard Pease and the rest of the team contrast so well in styles should see the European arm goes from strength to strength.”

Born: Rock Ferry, Liverpool, 1962

Lives: Park Gate

Career: 2007-to present: New Star, manager of European values fund; 2001-2007: Tilney Asset Management director of European equities;

1990-2001: BWD Rensburg, UK equity desk; 1989-1990: Wise Speke senior account manager; 1986-1989: Ashton Tod Mclaren research analyst

Likes: Walking, reading, rugby and spending time with the family

Dislikes: Egotists

Drives: VW Passat

Film: Shawshank Redemption

Book: Capital Accounts

Band: Beatles

Career ambition: To have no regrets

Best piece of advice I’ve received: Never give up


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