continued...

What was the low point?
Probably when we got sucked into stocks that had looked fundamentally attractive in 2003. We had a nagging suspicion that 2004 would be a difficult year, our instincts proved right and these stocks duly rolled over. It was like enduring a slow-motion nightmare.

Things are better now. The market’s mean reversion transition phase in 2003 and 2004 is now over. Transition phases are always difficult for us. And fundamentals are now important again, which means the environment is better for our process.

You helped facilitate the appointment of your new European fund management team. How did this come about?
I had kept in touch with Gary West after I worked with him and James Inglis-Jones at Flemings in the late 1990s. I have experienced working with a lot of fund managers and one gets to know almost instinctively which ones are good and which ones are not. I thought then, and still do, that Gary and James are good managers of money.

Last year we were busy seeking new teams to help us expand Liontrust. A logical first step was to expand into Europe. James and Gary are experienced fund managers with a sensible process, who I thought would fit in culturally at Liontrust. We offered them an environment in which to focus their existing process, a good sales and marketing machine and a real commitment to them and their investment process. The hard part was structuring the right deal for them, for other members of staff and for shareholders.

This is where Nigel Legge, our chief executive, and Vinay Abrol, our chief operating officer, put the right deal together that used our position as a publicly quoted company to get the deal right. James and Gary have a clear sense of what they want to do. What Jeremy and I did was to identify the main drivers of their process, helping them to be brutal in focusing on what was important. We are now ready to go and the next few months are all about raising money for their European equities investment process. I am really pleased with what we’ve got and it’s great for the whole firm to have another area of investment focus.