Neptune fund manager Robin Geffen has revealed how a meeting with former Royal Bank of Scotland (RBS) chief executive Fred Goodwin before the financial crisis has caused him to avoid bank shares for a decade.
He said he owned shares in the Dutch bank ABN Amro in 2007, when the bank was taken over by RBS following a bidding war with Barclays. ABN Amro is both the last bank, and the last European equity he has owned in any of his funds.
Speaking at the Investival conference hosted by AJ Bell yesterday (November 15) he said: "I saw the look on Fred Goodwin’s face when he realised he had bought ABN Amro, he was taking about how he was going to buy something else and something else, and then buy Goldman Sachs and be the biggest bank in the world. I haven’t owned a bank share since then."
The ABN Amro deal added considerable debt to the balance sheet of RBS, and the bank had to be bailed out by UK taxpayers within a short time of that deal being completed. Mr Goodwin left his role as chief executive at that time.
Mr Geffen runs the Neptune Balanced Fund, the Neptune Income fund, and the Neptune Global Alpha fund. He is also the founder and chief executive of the company.
He said the mania he witnessed in the banking sector prior to the financial crisis now seemed to be a feature of many technology companies.
At yesterday's conference he elaborated: "I asked Mark Zuckerberg seven questions about the business strategy for the company, and he couldn’t answer any of them.
"What I got back was ‘Mark has a vision’, well I think visions are best left in baptist chapels. I won’t be going back there, and I don’t think they would have me back."
Henry Dixon, who runs the Man GLG Undervalued Assets fund, said UK banks were in "the best shape they have been in for years" due to the level of saving in the economy, relative to the level of debt.
He has HSBC among the top ten investments in his fund.
david.thorpe@ft.com
