Investments  

‘There’s no shortage of people to tell me I’m being stupid’

Patrick Barton may have started his working life as a commercial banker but today he is better known as a fund manager who specialises in UK equities, running the IWI Oriel UK fund at Oriel Asset Management.

He is also well known for being outspoken and controversial in an industry where fund managers are generally expected to toe the corporate line.

Commercial banking is not an industry he looks back on with any particular fondness, although it was when he was working as a commercial banker for what was then Chemical Bank, now JPMorgan Chase, in New York, that Mr Barton’s career took a slightly different direction.

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He recalls that between 1982 and 1985 “there were two things that happened in New York that set the foundations for wanting to get into the equity and fund management side of the financial world”.

“The first, which was not relevant at the time but became incredibly relevant, was that somebody in 1982 very kindly suggested to me that a good share to buy was something called Berkshire Hathaway. So with a very modest amount of money I bought shares in Berkshire Hathaway which, if I’m honest, at the time really didn’t mean very much to me.”

He continues: “Then, in 1985 I was put on a Stern Stewart programme, which probably invented economic value-added analysis. What it did for me, and I suspect a lot of people, was join up share prices and businesses. It linked the two in a way that I’d never really appreciated before.

“It gave me a way of evaluating and valuing businesses that I’d never had and it then started to make sense why somebody had told me to buy Berkshire Hathaway shares. So from that grew a realisation that this was a more interesting area for me than commercial banking which, if we’re honest, isn’t very hard.”

So he moved into a small fund management business within Chemical Bank in 1987. He spent two years there, before considering his next move.

Mr Barton says: “What became very clear was that if I wanted to take this seriously I needed to go to a proper equity-driven institution rather than one that had a little bit of fund management on the side of a large bank.

“So I joined Norwich Union in 1989, initially as a pensions fund manager. It had the added convenience of being out of London, which at the time, from a family point of view, made sense.”

His admission that it went “quite well” at Norwich Union is something of an understatement as he was made head of UK equities at the company only a few years later – a role he held until 1997.

“At that point, for reasons that largely escape me, I decided the right thing to do then was to go and be a sell-side banks analyst, which I did for what felt like about 40 years but was actually about nine,” he notes. “I spent four and a bit years at Credit Suisse, first as the UK banks analyst and then co-head of pan-European banks, which was a very valuable education but not a job I would recommend to anybody else, apart from a committed masochist.”