Did you feel the aftershocks over on the institutional side of the investment divide? I can hardly believe you failed to for, here in retail world, these have been momentous times. Forget eurozone QE, ‘ceasefires’ in Ukraine, the Greek election and everything else – when the history books are written, the start of 2015 will be remembered for one thing above all others.
I am of course talking about how the marketeers finally found a new way to characterise investing for the longer term. Yes, after many months locked away with little more than a whiteboard and a copy of Roget’s Thesaurus for company, these pioneers finally split the investment communications atom with their discovery of the concept of ‘patience’.
I suppose it is possible this revolutionary idea has been floated in the past but it can hardly be said to have caught on – indeed, when it comes to the exhortation to ‘be patient’, history suggests retail investors tend to react to the with same degree of equanimity my four-year-old daughter displays if she hears those words while on the hunt for Haribo.
Nor, I learned only the other day, should institutional investors be feeling too smug in this regard – in a recent Events-Hub presentation, Baillie Gifford’s head of European equities Tom Coutts highlighted the misalignment of interests in the ‘pension service provider supply chain’ sketched out by Johnson and De Graaf, in their 2009 paper, Modernising pension fund legal standards for the 21st Century.
While scheme participants and beneficiaries may have a time horizon of 30-plus years, say the pair, the timeframe of trustees and governors is between four and six years – which is only really impressive when you add in the context of the 12-month outlook of investment managers and the whole three to 12 months, on which company directors can apparently bring themselves to focus.
Maybe patience’s time has finally come then – a possibility given greater weight by the spooky fact not one but two fund groups have been majoring on it. In a heart-warming instance of synchronicity, not only is Invesco Perpetual running a whole advertising campaign based around the virtue but Woodford Investment Management is launching its Patient Capital Trust.
Product and campaign lead-times being what they are, we may never know for sure where the very first spark of inspiration originated – although clearly there is something in the Oxfordshire air that encourages longer-term thinking among professional investors. Better perhaps to call it honours even – especially as the two campaigns could prove subliminally self-reinforcing.
Of the pair, however I must confess a preference for the Invesco Perpetual approach – not because I have anything against a fund that sounds like a lost Thatcherite blueprint for the NHS but because the investment industry would be a better place – indeed, a more ‘Beautiful world’ – if more advertising campaigns were inspired by Take That songs. ‘Pray’ sends the wrong message but ‘Shine’ and ‘Could it be magic’ work and there may even be mileage in ‘How deep is your value’.
Julian Marr is editorial director of Adviser-Hub and co-author of ‘Investing in emerging markets – the BRIC economies and beyond’.
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