‘People’s experience of investing in resources tough’

Duncan Goodwin is in the position of having worked on both the sell side and now on the buy side in asset management, in what he calls a series of “pretty deliberate progressions”.

He started his career at Shell and at the start of this year took on the role of head of resources at Baring Asset Management.

Mr Goodwin begins: “I read economics at university and was pretty clear that I wanted to go into a business-related qualification post graduate. I was less keen to go into straight accountancy, I wanted to learn a skill while working in an actual industry.”

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It was the oil industry that was to be his calling. “The more I looked into the oil industry, it looked a really interesting place,” he admits. “Every geopolitical dynamic seems to be influenced by energy and resources, so it was a natural progression into that industry.

“I had a great time at Shell. I was there for a number of years, and I got my accountancy qualifications and really understood how companies operate. We’re in such a luxurious position in asset management that we’re seeing chief financial officers and chief executives all the time. You forget the background that is driving all the decisions they are making from an industry perspective and how difficult it is to run companies. I’ve seen that from a company perspective so that was really interesting.”

But after five years at Shell, Mr Goodwin decided to pursue his interest in the markets. It’s an area he had acquired a taste for while serving an internship at Lehman Brothers during his education, with the research side appealing the most to him. When an opportunity arose at Lehman’s, he left Shell and moved across.

He continues: “I was just understanding a bit more about whether it [equity research] suited me and it was a reasonably quick transition from Shell into the sell side.

“I got my education on the sell side in terms of how markets interpret what the companies are saying and interpret earnings drivers on a wider basis. I then stayed within the energy sector, looking at oil service companies, exploration and production companies, but it was there I came to understand very clearly how markets operate.” Roles on the equity research side at Citigroup and Merrill Lynch followed. It was the changing nature of his role that finally prompted Mr Goodwin to move across to the buy side, though.

He reveals: “I was increasingly being asked by clients on the buy side to go in and speak to management and to look at companies that I didn’t formally cover. It was almost like a due-diligence process.

“There are very different drivers on the sell side. You’re looking to generate turnover; you’re looking to engender flows in companies. As I saw this push to go more and more into analysing companies that I wasn’t formally covering, I thought it was a natural progression to go across to the buy side and actually be paid to investigate and then buy the right companies.”