For Georgina Brittain, small- and mid-cap manager and managing director at JPMorgan Asset Management (JPMAM), it was so out of favour in the depths of the downturn that she describes the period as an “absolutely horrendous time”.
“All the money I run is relative to a benchmark, so we were in the extraordinary situation where we went down, for example, 20 per cent and the benchmark fell 35 per cent. That is a good result for what we were asked to do, but the point is you are coming in every day watching your clients’ money disappearing, and watching valuations crumbling at your feet and obviously people weren’t exactly turning around giving us money to invest.
“It would have actually been a perfect time to invest, but the world doesn’t work like that,” she smiles.
However, the start of the turnaround was almost as fascinating according to Ms Brittain, as companies fell to extraordinarily low valuations, particularly in the smaller companies sector. It was not until 2009 that it became clear that equity investors were willing to recapitalise these companies and banks started lending again.
“Suddenly we weren’t sitting on the edge of the precipice [anymore]. At that point, you can re-evaluate what you’re holding, why you’re holding it and we started to change the portfolio in a really big way to take advantage of the uptick,” she says.
Understanding behavioural finance is something that underlies how Ms Brittain invests, particularly why investors do the same thing time and time again, and how to take advantage of that.
She explains: “One thing is running your winners; people are much more likely to sell a winning stock than a losing one and they sell it too early. Also one of my strengths is cutting the losers. Investors don’t like to crystallise their losses, because that is it. My view is that I want to take the money out of something losing me money and put it in something that is going to make me money. It’s still not easy and you still look like a fool – we all get things wrong – but I’d much rather just admit it and walk away as soon as possible.”
Fund management is a competitive business and for this manager, that is one of the best things about it.
Clearly enthusiastic about her work, Ms Brittain acknowledges that while she is “almost a lifer” at JPMAM, it says a lot that she and many of her colleagues still do the job and still enjoy it.
“My view is that, if you are a tired fund manager you can no longer do the job. You have to be absolutely driven; this is an utterly competitive job so you have to always want to win and beat your benchmark and beat the opposition, but you also have to be interested. If you’re not interested in the actual companies, in the detail, then it’s not a job you can do well,” she explains.
Ms Brittain has been running small-cap money for more than 15 years, including the JPM UK Smaller Companies fund and JPM Smaller Companies Investment Trust since 2000. Then in April 2012, her remit expanded into the mid-cap space after taking on the management of the JPMorgan Mid Cap Investment Trust.
On taking on the latter, Ms Brittain admits she questioned whether she could manage both small and mid caps in different funds.
“There is a little bit of overlap in terms of holdings. People often ask, ‘How do you divide the time?’, but the answer is time divides itself. It is just obvious. There are so many things to do, so many things to look at, so many pressures on your time, it just becomes self-evident which ones are highest priority, which are most likely to move, which are likely to move performance. It sounds a bit vague, but there is never any issue about where you need to be spending your time.”
Her small-cap specialism, however, was more “fortuitous” and down to “absolute good luck” than planned, according to Ms Brittain, whose first role in the sector was in the research department at Flemings Investment Management, which now forms part of JP Morgan.
“That was very deliberate; that was what I wanted to do because that way I could either pursue the fund management career or go down the analyst route. It left both doors open.
“After a couple of years – I call it ‘the apprenticeship they wouldn’t have’ – I let it be known that I definitely wanted to become a fund manager and the first available job was on UK smaller companies. When I say that was fortuitous, I mean that from where I sit it has been incredibly lucky for me. From my angle it’s the more interesting area of the market – rather than large cap. This is where a fund manager can add real value.”
In an industry full of themes, clichés and marketing messages, Ms Brittain laughs when she describes the current phrase being used by the team at JPMAM – “discover hidden gems”.
“It is a bit silly, but the idea is true,” she says. “We can own little companies, ride them all the way up, [and] obviously sell when they go into the FTSE.”
She uses the example of ARM holdings, which was bought into the fund on the day it floated and formed part of the portfolio until it entered the FTSE and the manager sold it. “It is now one of the most successful companies in this country,” she claims.
“That is an amazing example; you obviously don’t get that every day of the week, but no one who runs FTSE [large cap] money can have that kind of excitement I think [or] find those incredibly compelling stories.”
While its clear Ms Brittain has found her niche, fund management wasn’t always her dream career. In fact she notes: “I always wanted to be a barrister, that was my plan; that was my purpose in life, and so I read classics at university because everyone said don’t read law because it’s a very tedious degree.
“So I did a good degree, but one that wasn’t going to take me anywhere specific. I qualified as a barrister and then thought, ‘Oh Lord, what have I done?’” she laughs.
“At that point I had a proper look around. I thought, I’ve got a great qualification as a barrister, [but] I’m allowed to change careers once, so let’s find out what the options are. That’s when I started discovering all these people that I knew who were fund managers and the more I talked to them, the more I said, ‘Wait a moment, that sounds absolutely the job for me’.”
However, she adds, the favourite part of the job is related to the competitive nature of the role.
“The honest truth is the better you’re doing, the more you enjoy it. When I say it’s for competitive people I did mean it, and I am competitive to my very fingertips. So the best thing that can possibly happen is when you’re in the right place, your companies are doing the right things and your funds are outperforming.”
CV
GEORGINA BRITTAIN
2012 – present
Began managing the JP Morgan Mid Cap Investment Trust
2006 – present
Appointed managing director of JP Morgan Asset Management
2000 – present
Began running JPM UK Smaller Companies fund (OEIC) and JP Morgan Smaller Companies Investment Trust
1998 – present
Began managing money at Fleming Investment Management (now JP Morgan Asset Management)
1995
Joined Fleming Investment Management
1994
Called to the Bar
1991
MA in Classics from Oxford University from Oxford University
