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Tech it or leave it

As investors fall over themselves to invest in the Chinese version of Facebook and the Russian version of Google and, well, the original version of LinkedIn, things are beginning to feel distinctly early 2000, which is also when I made my first fund investment. I have mentioned the circumstances here before but, as we are talking about the past repeating itself, it seems appropriate to do so again.

So, 11-odd years ago, after somehow bagging a piece of freelance that paid £1,000 for a weekend’s work, I decided to make a high-risk investment. Worst-case scenario, I reasoned, I would merely have lost a weekend, meaning the only difference between that and the other times would be the lack of a hangover.

Speaking of which, I had recently attended the annual awards of this very magazine and, having briefly made it to bed at 5am, found myself four short hours later interviewing a tech fund manager and, well, it is possible I may have fallen asleep for a few minutes.

I know the story does not paint me in a good light although, in his enthusiasm for all the exciting develop-ments in the technology sector, the manager did not appear to notice. Who else was I possibly going to entrust with my grand?

Eleven years on, with my money still well short of four figures, some ideas do occur but I certainly learnt from the experience – not least that there is a world of difference between “exciting developments” and “money-making opportunities”.

So, why the trip down memory lane? Well, my investment has had so many name changes I cannot be 100 per cent certain but I think it is now Henderson global innovation, which was one of the featured funds on the IQ roadshow I recently chaired.

I suppose it is debatable whether falling asleep in a one-to-one interview or as an event chairman is the greater faux pas but, either way, there was no chance of the latter as Stuart O’Gorman, Henderson’s director of technology investment and the fund’s co-manager, had a lively story to tell. Anyway, these days, midnight is about my limit for bedtime.

O’Gorman pointed out how so many factors that used to be considered investment tailwinds – most obviously, demographics – can now be seen as headwinds. This brought to mind the views of Thomas Malthus, the early 19th Century economist, who argued the world’s increasing population yet finite resources meant it was only a matter of time before we are left, as O’Gorman put it, fighting over the last potato.

“What Malthus massively failed to take into account, however, is the power of human innovation,” he continued. “If a problem is big enough, there is usually a lot of money to be made from solving it and then humans can be very innovative indeed.”

Thus the UK energy crisis of the 16th Century, which in those days revolved around wood – supplies down, prices up, plus a change – led to the first coalmining operation and the seeds of the Industrial Revolution. “One problem’s solution meant the creation of many new industries and a lot of money for a lot of people,” observed O’Gorman.

Malthus may not have been much fun at dinner parties but he did have a point about global resources so a key requirement for any successful innovation these days is that it “does more with less”. O’Gorman felt this phrase neatly summed up the investment philosophy of his port-folio although he also suggested it might be called the “Vulture fund”, because it would feed off the corpses of businesses that did not adapt. That is quite an image but certainly encapsulates, say, Yell’s experience at the hands of Google.

However, as the frenzies surrounding solar panels and nanotechnology have shown in the recent past, innovations do not always live up to expec-tations – or at least not imm-ediately. The trick therefore, according to O’Gorman, is to be able to surf the “manic depressive wave” that leads from “hype” through “disillusionment” to the good bit, “recovery”. “There is a lot of money to be made riding the highs and lows of innovation,” he concluded. “However, getting sucked into the hype is very easy and very dangerous.” Yes, Stuart, I know that – now.

Julian Marr is editorial director of and



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