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.
“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.”
Indeed, panic markets have become part of Mr Tigue’s DNA – and something he has started to long for after the bull market of recent years.
When he started in 1981, British companies were losing money, manufacturing was in crisis, unemployment was high and inflation was bordering on 12 per cent. But while the nation was in economic turmoil, F&C’s new man was delighted at the opportunities presented to him and declared it a “great” time to start in investment markets.
“Things are more interesting when markets are very up and down, whereas at the moment it is very difficult to find pockets of value as we are five years into a bull market,” he said.
However, he argues that his experience of recessions is of limited use. “Each one is very different from the one before, so you cannot really learn a huge amount,” he said.
“You tend to be governed by the first one you experienced. It is very difficult to predict in advance the effect of quantitative easing or to ever have any rational economic forecast. But it does not last forever. You just have to survive it and make sure you are never too exposed to any particular sector.”
Mr Tigue remembers his older peers in the early days getting excited at the prospect of stockmarket volatility, describing it as a process that “separated the men from the boys”. And now that he has grown to become a veteran of his field, he too believes that a calm head and experience are key components to thriving in tough times, which is why he claims older fund managers are best suited to bear markets and younger ones to bull markets.
He said: “If you are in a bull market you should have a young fund manager who is more attuned to markets of that period. In bear markets, on the other hand, you want experience. The sort of go-go companies the young fund manager invests in tend to struggle in times of crisis.”
Although talk of bear markets obviously excites Mr Tigue, he ruled out the prospect of returning for the next one. Glad to be leaving the industry in a period of calm and with his head held high, he is happy to wave goodbye when popularity in investment trusts had surged – thanks to the RDR, simpler illustrations and the success of platforms – dividends are healthy and his mental health is still intact.
He said: “Most people still think I am still in possession of my marbles and that I should leave while I possess them. Lots of people tend to stay on too long.”
Daniel Liberto is features writer at Financial Adviser
Mr Tigue’s career ladder
1997-present
Manager, Foreign & Colonial Investment Trust
1981-1997
Analyst, junior fund manager and fund manager, F&C Investments
1981
MA, University of Oxford
Other roles
2012-present
Chairman, BACIT
2012-present
Non-executive director, The Mercantile Investment Trust
2008-present
Non-executive director, Graphite Enterprise Trust
2006–2008
Chairman, Institutional Shareholder Committee
2003-2013
Board member, Association of Investment Companies
