Category: Analysis & comment

Wellcome inspiration: a 10 point checklist

FIRE v London4 Comments

The Wellcome Trust caught the news this week. Its claims to fame this year include:

  • It is the world’s second biggest charity (behind Bill & Melinda Gates).
  • It has donated over £1bn last year.
  • Its boss, Danny Truell, is the UK’s highest earner in the charity sector. His pay rose £1m to £3m last year on the back of excellent five year investment returns.

Continued outstanding performance

I first studied the Wellcome Trust in 2012. At that point it had about £14bn under management, and about 20 investment professionals.

The Trust has just posted strong investment returns of 19pc, takings its assets up £3.5bn to £20bn. Managed by 25 people.  I’d say its boss is earning his pay.

Last year’s excellent results were largely because the Trust made an strategic decision about a year ago to downweight its sterling exposure. Apparently normally it wants at least 25pc UK exposure, but sometime pre-referendum it decided to waive that requirement. Its assessment was that the Brexit risks were asymmetric, with much greater downside than upside. This was a very similar perspective to my own call in January this year, which has served me very well too. I’d love to know how exactly they implemented the shifts involved as it isn’t easy to do without trading costs.

The fund has compounded over 15% since 1985.  This is astonishing performance, of a Buffett-beating level. Over time the Trust has consistently outperformed the market, without running extra risk.

A Wellcome Trust 10 point scorecard

My assessment of the Trust highlights 10 characteristics it follows. Many of them I share, but not all.  These ten points are as follows (apologies if you’re reading this on a smartphone!): Continue reading “Wellcome inspiration: a 10 point checklist” →

Injuring private bankers’ wealth

FIRE v London9 Comments

This post is a follow-up to my September post – how private bankers injure your wealth.

I recounted how I was rather horrified/shame-faced to analyse the fees I’ve been paying one of my private banks for far too long. When you considered the double layer of fees due to my ‘fund of funds’, I was paying around 2.05% for a discretionary portfolio.   And the performance didn’t in any way justify this level of fees.

I had some very useful comments about my predicament.  The gist was that I should try to negotiate.  Perhaps I could even offer to introduce some total suckers very daft friends to the service. The commenters included people, like me, who do value the service from a private bank and who empathised with my intention to keep the relationship live – albeit at a lower cost base than before.

So, what happened next?

I confronted my bank with my analysis.  I suspect they were thinking ‘what took him so long?’ because they were ready for me.  And, no, they haven’t fired me yet – unlike the other private bank in my portfolio.

It turns out they are all too happy to stop managing discretionary portfolios manually, and they have an alternative approach.  Continue reading “Injuring private bankers’ wealth” →

I’ve just been fired by Goldman Sachs

FIRE v London12 Comments

Our relationship began almost twenty years ago, when I was in my impressionable twenties. I was young, free and, erm, approximately single. It began almost by accident.  I was working for an American firm, I had shares in the company, there was a public markets event which I took part in and the next thing I knew I’d begun a long distance relationship.

It wasn’t ever a particularly passionate, intimate relationship.  In fact I got much more involved with another member of the same family, in London, in a brief fling that left me hurt, scarred and financially damaged.  But somehow the long distance relationship continued.  Occasional phone calls usually with me asking for something. A few letters – an annual ritual, for the most part.

I considered splitting up earlier this year.  I was trying to buy a house and I needed some help, some support.  I picked up the phone, and I made my feelings clear.  I had worked out what I wanted and I asked for it. I was told No, not if I wanted to stay in London.   When I realised I couldn’t rely on the relationship, and in fact got more support from other relationships in the UK, I almost broke it off.  But somehow I just reduced my involvement even further and kept going through the motions.

The phone calls had now become only occasional events, and were always about money.  I can’t remember the last letter I received.

So imagine my surprise when I got a letter, last week.  With the familiar postmark.  When I opened it, I couldn’t quite believe my eyes – what I was reading.  No personal greeting, even.  Just cold, impersonal prose.  Not even an ‘it’s not you, it’s me’.   Just complete clarity that our past relationship (!) is over, and a request for me to remove my stuff by the end of the month.   If possible.

I’ve never been dumped before, let alone this way.  Thank God there wasn’t a request for money.

The letter’s below – judge for yourself.

Continue reading “I’ve just been fired by Goldman Sachs” →