Investments  

Firing Line: Jeremy Tigue

Daniel Liberto

Jeremy Tigue has come a long way since first entering the doors of Foreign & Colonial 33 years ago as an excited graduate with a salary four times his student grant and no concept of income tax.

The veteran fund manager, who recently announced his intention to retire at the end of this year, has since earned a reputation as one of the City’s best managers of money after raising dividends for F&C’s Investment Trust every year he has been in charge.

But whereas plenty of the industry’s high-profile managers are eager to talk up their individually orchestrated strategies, Mr Tigue attributes the success of his flagship fund to the culture at F&C. Diversification, gearing and keeping cool during bear markets, he says, are the key ingredients to the success of the fund. Contrary to what other active fund managers might claim, the rest is mostly down to luck.

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“Markets are unpredictable, and from our general experience it has always been the philosophy of the company to diversify and spread out risk,” he told Financial Adviser. “Fund management is not intellect or having a lot of mathematics; it is more basic. I have an O-level in Maths and I am not an economist. It is about common sense and knowing your limitations.”

As the manager of a fund with about £2.5bn in assets under management, Mr Tigue’s responsibilities have led him to a number of basic conclusions. Very much a conservative investor, he describes differentiating for the sake of it as “a recipe for disaster”, preferring instead the “boring” approach.

He also criticises overdoing it. Mr Tigue says a successful fund can be run by making just four decisions a year. Some managers, he says, are keen to make weekly alterations, but Mr Tigue argues that “[getting] bogged down making lots of little decisions” is bad news.

When a rare contrarian move in 2003 saw him invest in emerging markets and then significantly reduce exposure before the sector crashed, he was quick to attribute “one of his greatest ever plays” to luck. Others may have sought to promote such a moment as an indicator of their successful management; Mr Tigue said simply that “[getting a] contrarian move right both ways is very unusual”.

This kind of down-to-earth mentality has strong ties to one of his main beliefs, namely that the key to success in his line of work is accepting that things can always go wrong. As such, he says it is pivotal “not to believe your own publicity”.

When things have gone right over the past three decades, Mr Tigue has credited the whole company. But despite insisting that the united F&C approach is straightforward, one key aspect that he says separates it from the rest of the industry is its bold use of gearing.

“We have been much more successful in gearing and are not frightened about borrowing in panic markets,” he added. “Taking that brave contrarian approach has been good. Sure, people criticise our diversified portfolios, but with the risk of borrowing you do not want to put all your eggs in one basket.”