“In the world of business, the people who are most successful are those who are doing what they love.” – Warren Buffett
Meet Portfolio Manager, Neal Foundly, a prominent member of our investment team, renowned for his behaviourist approach in shaping investment decisions.
Having managed multi-billion-pound portfolios over a three-decade career, Neal has undoubtedly experienced the highs, lows, and exciting times of investing. Since joining Equilibrium in 2014, not only has he been instrumental to several fund launches, but he has also helped grow assets under management to over the £1bn mark and gets a buzz from helping clients get the returns they are aiming for over the long term.
Here, we uncover the mind behind the milestones…
During your career, what has been your biggest motivator?
“No-one has the monopoly on investment performance – if you have capital to invest, you have as good a chance as anyone to get good returns.
“If I can achieve better returns for clients each year, this can then make a really big difference over, say, 10 years. Our approach is to compound decent returns rather than shooting for obscene returns which comes with unnecessary risk.
“I really enjoy meeting our clients as they all have stories to tell, and their feedback is valuable. It’s important to know if we are meeting or indeed exceeding their expectations.”
Are there any investment decisions you regret?
“I recall in 2010, a BP-operated oil rig named ‘Deep Horizon’ suffered a huge explosion, leading to one of the largest environmental disasters in world history. At the time, I was running £2bn of portfolio, and BP lost half its value, causing a £63m loss to our portfolio.
“Looking back, there were signs that BP were not investing enough in their health and safety. This was an important lesson to always do some deeper digging.”
What experience has made the biggest impact in your thinking?
“I was and still am an early adopter of technology. In 1999, a former colleague and I set up a company after buying AI technology from Manchester University. We eventually sold it to a large company in California, which was later taken over by IBM for their AI focus on healthcare. Building and starting a business gives you a lot of appreciation when it comes to investing, and today’s advancements mean we now have better access to data.
“Obviously I have more experience now, but one thing that I do not deviate from is that I always need to be able to support my investment decisions with three good reasons to trade such as new management, or improved fundamentals.”
Do your personal and work investment decisions differ?
“No, I take the same approach – it’s consistent and saves energy. I would say I’m a calculated risk-taker. Almost all my money is in the Equilibrium funds – ‘skin in the game,’ as they say. If a client is hurting, I am hurting as well, but I back myself.”
What is your opinion on investment bots?
“Markets are intricate, complex systems that can adapt, but bots are limited to handling regular situations, which are rarely normal. For instance, a bot would find it difficult to handle unforeseen incidents like 9/11 or the Covid pandemic.”
What is the most niche part of your role?
“I run the Alternative Investment Market portfolio, where the investments are directly linked to companies, which is very different from managing our Equilibrium funds. It’s an exceptional service for our clients that would otherwise be very expensive if managed externally.”
How quick are you to react to market news?
“Not very… trade in haste, repent at leisure. My method is behaviourist, an observer rather than a reactor.”
How does the investment team set themself apart from competitor firms?
“We are evidence-based investors. We work on the basis of finding good fundamental reasons to trade, but you need the data and evidence of something to base it on.
“We continue to be vigilant about what others are doing but we do not compete or copy. Also, our team’s flat organisational structure allows us to work together to make decisions and, if necessary, carry out each other’s responsibilities.”
What has been your biggest inspiration?
“In the mid-1990s, I became aware of Warren Buffett. At that time, the city was dominated by public school old boys or hard-bitten MBA investment bank types – I fall under neither camp.
“I felt an instant connection to this guy from Omaha who didn’t fit the mould yet was making a real success. I knew I could apply something different with my use of technology.”
Do you think there will be any fundamental changes to the investment world in the next 20 years?
“In terms of markets, I think the UK and other markets will be subsumed into a non-US global index. There will be a US index, and then the UK will be part of a global index.
“I also think significant trends such as cash becoming obsolete, renewable energy dominance, advances in healthcare, and innovation and behavioural changes in areas like education and housing, will influence investment decisions in the coming decades.”
Speak to us
If you have any investment questions or would like to know more about our AIM portfolio, please call us on 0161 383 3335 or by reaching out to your usual Equilibrium contact.
