Interview with Joe Mares of Trium Capital

Published in Hedge Magazine, August 2019. Original article p32-34.

There’s only one game in town for Joe Mares: energy transition in the face of climate change. “This is the defining feature of how to invest in the sector,” says Mares, who’s spent 20 years investing in the oil, gas, metals and mining sectors,. It’s not enough to support the companies already doing their part – Mares wants to go out and talk to the companies who could be doing better on the emissions front and help them put their houses in order: “Most companies want to still be around in 25 years, so it’s about harnessing that instinct.”

It’s the height of summer when I meet Mares at Trium Capital’s offices in the City of London. Mares comes in with a firm handshake, greeting me in a broad American accent. He’s been in Britain since 1999 – he lives in zone one with his wife Etain, an Irish journalist, and their two children. A tall guy in a dark blue suit and striped tie, Mares takes up a lot of space in the room, but he’s also very personable – a few minutes into our conversation I put down my notebook and we just talk. “I like London a lot. It has a wonderful mix of people from all over the world,” he says. “Most people, if you talk to them about their life, they’re very interesting.”

We’re here to talk about the ESG Emissions Impact (Equity Market Neutral) UCITS Fund, of which Mares is Portfolio Manager. An ESG (environmental, social and governance) fund has a mandate of proactive engagement to achieve positive Impact – this one focuses on the “E” in the acronym, engaging with companies in high-emitting sectors to implement strategies to lower CO2 emissions. The official launch date is 30th September, but Mares has been working on it since February: “We’ve used the time to start engaging with companies, discussing our ideas and understanding who actually has the capability to implement some of our suggestions and who doesn’t.”

*

Asked if the Trium ESG Emissions Impact Fund was Mares’ idea, he answers in the affirmative, before bursting into laughter. He did initiate the fund, I gather by what he says next, but he’s also a team player: “You get things accomplished a lot quicker when you’re not worried about taking the credit!” Because Mares will sometimes be suggesting things to people who probably want to keep that credit to themselves – and he’s fine with that. The key is the action: “In my opinion, what was missing in the ESG discussion was the role that the high-emitting companies could play in terms of reducing their emissions, and [how funds like ours can help] clarify, encourage and reward that.” So if Mares and his team is able to help modify a steel plant, a petrochemical company, a shipping group, or an airline, that’s vital to the overall goal: to reduce CO2 emissions. “We always say it’s not about cleaning your portfolio, it’s about cleaning the planet,” says Mares. 

We have 30 years to correct course, according to the United Nations, or life on earth will be changed beyond recognition – “the problem is terrifying”, Mares nods. But instead of just focusing on public companies who’re already engaged, he thinks investors should be looking more broadly: “Take shipping, which is about 2% of global emissions but more like 0.02% of global equity markets. If you asked most ESG industry professionals they’d probably say, ‘It’s a huge problem but it’s not in my equity portfolio.’ Our view is, ‘It’s a huge problem!’ Just because there are a lot of [private] companies in that sector doesn’t mean we don’t need to focus on it,” says Mares. This is where Trium is a little different – Mares doesn’t spend a lot of time talking to companies who have sustainability departments. “We’re talking with companies who’re typically small-to-medium market cap, they actually have the potential to basically change faster, and the solutions can be more radical.” This is also an untapped resource in terms of investing: “Many of those companies don’t have ESG ratings, or they’re rated very badly. But the improvement they can do per dollar of investment is significant.”    

Mares thinks the responses from the companies themselves have improved a lot in the last six months. Asked why that is, he says many of them are keen to make changes: “Nobody wants to be a villain, right? Most of them understand the long-term challenge and want to improve.” It helps that at the low-hanging fruit of emissions-cutting initiatives tend to save companies money at first, as they improve existing infrastructure. Also, they can see the writing on the wall – natural resources regulation tends to get tougher over time, and these are sectors accustomed to taking a 20-year view. “Most of the lifetime of an asset is going to be under future regulation,” says Mares. “I always discuss with them not only the governmental regulation but also the changes in the insurance industry, the banks, and their own customers” – things are only going to go one way. “[I tell them,] if you’re the first to prove industrial scale on [a green initiative], you’re going to have a tremendous advantage.”

Mares also thinks too much ESG data is historic, failing to take into account where things are heading for the future – that’s not the reality for how most companies operate: “Even the smaller companies in the sector have to think about the long-term, and they’re thinking about their carbon footprint four or five years out.” Mares likes to tell the companies to save their cash – don’t pay it all back to investors because they’re going to need capex to pay for these initiatives going forward. It’s an unusually long term view for an investor, but it’s indicative of how he sees his role: “If you’re advising people on corporate investments, you have to take a 10-year-plus view.” 

*

Mares (43) grew up in Washington DC, where both his parents worked in the government: “I always thought at some stage I was going to work for the government too.” Mares went to Princeton University’s Woodrow Wilson School, which prepare students for a life in public policy: “We took courses in economics, statistics and public policy, and then Wall Street gobbled us all up,” he laughs – the school has since made changes to try and avoid. 

This turn of events sent Mares on an unusual track for an ESG fund manager: he started out as an energy investment banking analyst at Morgan Stanley, spending nearly eight years there ending up as executive director of equity research. He very quickly realised he wanted to be involved in business operations, instead of what he calls “sitting there and trying to figure out how we can put on another layer of debt”. Mares moved on to GLG Partners and then Moore Capital Management, both of which were focused on natural resources in emerging markets. He then spent nearly six years managing an energy, shipping, and renewables portfolio at Societe Generale, before landing at Trium Capital in 2017. 

Mares’ best piece of advice came from his first equity research boss, who told him that people are spending too much energy writing overly detailed reports and having a thousand meetings a year: “My boss told me, ‘If you have a good idea, that’s more powerful than a thousand meetings.’ … We would have days where he was like, “Alright, we’re not going to speak to anyone, we’re just going to go sit and talk and think.’ That really inspired me.”

Despite his investment banking pedigree, there’s a different air about Mares – a fact that crystallises when he starts talking about his family: “My father, and grandfather too, was a chemical engineer. When I joined Morgan Stanley, my father said, ‘Wouldn’t it be great if you actually built something, like I and your grandfather did? Moving around money isn’t the only purpose in life.’” Mares pauses for a moment – he looks like he really means it. He never assumes people aren’t interested in wanting to do the right thing: “My father and grandfather were very concerned about plant safety and the environment. There are a lot of people in high-emitting industries who really take pride in what they do, and want to improve. … These organisations are very powerful when you actually provide information, and a direction for them to change.” 

There are many ways to make a difference, and Mares certainly believes we need to tackle climate change – soon to be the defining problem of our time – from many fronts. He tells me about the time when he and his father considered running small-scale biodiesel plants in Ireland, only to realise it’s too hard to compete with corporations. “It was an eye-opener for me about how real change will have to be done through scale,” says Mares. “We have to use the existing capital and relationships. If we’re going to actually achieve our goals, corporations are one of the most effective tools we have.” 

The case for making a digital will

Published in BL Magazine, July 2019 (original article p58-61).

The case for making a digital will

When writing a will that determines who gets the house and who gets the good china, take a moment to also consider what should happen also to your digital assets after the final curtain.

We all know you can’t take it with you – but for a lot of our digital assets, there’s no set procedure for how to pass it on to someone else. While the law has provisions for what to do with money even if there’s no will, chances are that your digital assets will be left to languish if you don’t leave instructions.

When we say “digital assets” we’re not talking about things like online bank accounts, as those funds can be inherited like any other financial assets. We’re talking about things like a library of digital photos that reside behind a computer password, sitting in a data centre owned by Google or Microsoft. It’s a music collection worth thousands of pounds on Apple’s iTunes. It’s a library of books on an Amazon Kindle, a gambling account, a Bitcoin wallet, frequent flier miles, a personal website, an Instagram account which makes money from advertising, or a Facebook account that’s just for friends and family. 

Only 13% of us have made plans for their social media accounts after death, according to the Digital Legacy Association, and only 2.3% have made plans for our purchased digital assets. But the technology companies that often hold our digital assets won’t just pass on the data to a spouse or parent without clear instruction – to them, user privacy is paramount. Earlier this year, Rachel Thompson successfully requested that a UK court compel Apple to give her access to her late husband’s iPhone, so that she could download his 2,000 family photos for the sake of their young daughter Matilda. Tech companies have usually complied with court orders like this, but as a digitally minded population starts to age, this will become an increasingly common problem and we can’t all go to court. 

*

A tangible asset can be passed down in a will under the law regardless of whether it has value. People assume the same will be true for digital assets, but it’s not. “This is an emerging area of law,” says Gary Rycroft, Partner at Joseph A Jones & Co in Lancaster and Chair of the digital assets working group at the Law Society. Commenting on the Thompson case, Rycroft says: “The point Apple is making is that they’re [holding] data for someone who they have a contractual arrangement with. They don’t want to breach that contract without having either express permission of the person, or a court order.”

Rycroft doesn’t think we’ll all end up in court over this, as long as we catch on to the fact that we need to leave instructions: “Making a will is key. Make it clear what you want, and then Apple or whoever will know that they have your blessing to pass on your digital assets to [your nominated person],” says Rycroft. Several digital services now have procedures to formalise this process: Google’s Inactive Account Manager and Facebook’s Legacy Settings page both let you nominate a trusted contact to handle the account should you pass away.

But the nature of ownership is changing. While one photo storage service will let users rent storage space and retain ownership, others will not – anything you upload to Facebook becomes theirs, for example. And anything that you buy on iTunes isn’t actually yours, but just something you have the right to access – and that right dies with you. 

Donna Withers, Head of Probate and Wills at Bedell Cristin in Jersey, says that the matter of digital assets is so new that clients who come to see her don’t often have a good grasp on it. “It’s something that we bring up with people whenever they’re making their ordinary wills. We will ask them what [online] accounts they have,” says Withers. Like most modern day will and probate lawyers, Withers finds herself having to tell people about what is and isn’t possible to cover in a standard will. The fate of people’s digital assets will come down to the terms and conditions of the service in question, and it can vary widely: air miles or flight status will vanish when the user dies, for example. Instagram will memorialise or close down an account upon receipt of a death certificate, while Twitter only offers the option to delete. With Bitcoin, there’s only one password and if that is lost, the money is too – that’s what happened earlier this year when $190 million in cryptocurrency was permanently lost following the death of the person who held the key. 

A simple solution to all this is to write down all your online accounts and passwords, alongside instructions for what you want to happen to your email account or Facebook. “But that goes against digital advice that you should never write down your password. Not to mention that you could be in breach of the terms of your contract,” says Withers. As a lawyer she cannot recommend this course of action, but she says it’s common for people to leave sealed envelopes alongside their wills to be handed over after death. 

*

There will be as many as 2 billion dead Facebook accounts by the end of the century, according to the Oxford Internet Institute. Some people like the idea of living on in digital form, whereas others find it distasteful – leaving behind instructions will likely be reassuring both for you and your family. But a will governing the fate of digital assets may not be legally binding, as people are ultimately bound by the individual user contracts with the companies that issued the service. The Digital Legacy Association has templates for a “social media will”, noting that this is a “statement of preferences” and not something that can be enforceable in court. 

Elisabeth Ferrara, a Legal Assistant who specialises in wills and probate at Viberts on Jersey, recommends always printing wills and adding physical signatures and two witnesses, even for assets that exist in digital form – the law has yet to recognise a digital signature. 

Ferrara also points out there’s a difference between digital assets and digital presence, and you can only leave provisions in your will for the former. While you can argue that a social media account has value, the problem is that the user is probably still bound by the provider’s terms and conditions.  “In Jersey we have [two] types of assets: immovable estate is property and land, […] and movable assets which tends to be pretty much everything that isn’t land.” This broad definition is helpful, as a social media account which earns advertising, for example, could count as a movable asset under the law. “The nature of assets is changing with the growth of electronic assets,” says Ferrara, pointing to how we’re actually renting a lot of the things we may think we own. But if the law changes to bring that ownership back into our hands, Ferrara says that the broad definition of movable assets under Jersey law means the jurisdiction should be reasonably well set up to respond to it. “But [currently], it is it is very much up to the company to decide what’s going to happen [to your data] after death.” 

Just like you’re not supposed to log into an online service as someone else, writing down your online passwords and putting them somewhere safe is technically not allowed. But that may not be something that most people consider to be very fair – if you’ve paid for the music, shouldn’t it be yours to do with as you please? And if you give your spouse your computer password, is that really a crime? Gary Rycroft expects the law might change to reflect the fact that people don’t find this fair: “In the States there’s been much more activity in terms of law reform, [arguing] we should be able to pass these [assets] on.” Rycroft thinks the UK will follow suit: “There’s increasing awareness by consumers and there [will be] a backlash eventually.” 

Until then, the service providers will in likelihood become better at dealing with the fact that customers die – and hopefully start prompting us to fill in the legacy information rather than hiding the form deep down in the settings. And while it’s technically not allowed, many of us will ultimately be leaving a list of passwords somewhere safe, with instructions to our loved ones to download our assets or close up accounts, without needing to go through the formalities.

When women aren’t given pain relief for invasive gynae procedures

An extended version of the story published in Broadly by Vice on 16th January 2019.

hysteroscopy

If your doctor told you to take two paracetamol before coming in for a small medical procedure, what would you expect? As I went in for my first hysteroscopy—a procedure that examines the inside of the uterus with a small camera to explore heavy or unexpected bleeding, pelvic pain, fibroids, polyps, fertility issues, or diagnoses uterine cancer—I figured it might be like a smear test, or maybe an IUD fitting. The hospital leaflet I was given prior to the procedure told me to expect period-like cramping. I took some paracetamol with codeine to be safe, and laid back with my feet in stirrups.

As the doctor inserted the scope through my cervix I felt my uterus fill with cold water. I thought, this feels strange, but ok. But then the pain started and it was no longer ok. I hyperventilated as I clamped down on the nurse’s hand. Soon I was unable to keep quiet, moaning in pain, and as the biopsy was taken I felt a stabbing electric pain spread from my insides and across my entire body. I shouted out, “Fucking hell!” Afterwards, as I was panting and sweating, the nurse asked me pointedly: “Did you forget to take any paracetamol?”

The nurse’s reaction left me thinking maybe I was unusual. Was I being a wimp? It’s hard to feel bold with water running down your legs as they hand you a sanitary towel the size of your shoe. But in the days and months that followed I couldn’t shake the feeling that something was off. Why wasn’t I given pain relief? But what happened to me is not unusual, and in fact, many women’s experience of hysteroscopy is far worse than mine.

“I was hit with this indescribable pain, like a nerve pain but twenty times over. It took my breath away. I wasn’t able to talk, I couldn’t shout out. My legs were twitching, I started to feel sick and I felt hot all over,” says Lorraine (66) from Leicester, who prefers not to give her surname as she might pursue legal action. “I told the doctor afterwards that if childbirth was a 10 on the pain scale, but that was a 15 to 20. He did not seem at all concerned or bothered.” Lorraine’s counsellor has since diagnosed her with PTSD from her experience: “I’m having nightmares, and actually seeing things in the day. I keep seeing this man,” she says, referring to the doctor.

Pain, it seems, is a routine part of hysteroscopy. The dentist will give you a shot before starting to drill—pain relief is available and common. So why does the NHS continue to send women to have their wombs poked and prodded on paracetamol? And why, when women are in obvious pain, do doctors ignore them?

*

NHS guidelines state that the pain levels accompanying hysteroscopies vary: some women feel “no or only mild pain,” but for others it can be “severe”. In a case like Lorraine’s, the guidelines say the procedure should be stopped and options for pain relief discussed, with options including gas and air, stronger pain medication, conscious sedation, or a up to and including a general anaesthetic.

The current guidelines from the British Society for Gynaecological Endoscopy’s (BSGE), the body overseeing hysteroscopy, does acknowledge that it “can be associated with significant pain.” Consultant Gynaecologist Justin Clark, Vice President of the BSGE, told me that hysteroscopies used to be done under general anaesthesia until the early part of this century, when technological advances meant the scope had become small enough to avoid needing to dilate the cervix. “But [the move to outpatient hysteroscopy] has also been driven by patients—by expectations of immediacy of care and getting a timely diagnosis,” says Clark. For women who find the procedure tolerable, this may well be a better choice: “People recognise that admission to hospital can have disadvantages, such as hospital-acquired infections and the risk of anaesthesia.”

Asked about the lack of concern women report about their pain, Clark is not unsympathetic: “A minority will have a very unpleasant experience, and if we could identify those women in advance that would be advantageous [so they can be given general anesthesia right away].” Revised guidelines from the BSGE are due in 2020, but a patient leaflet that addresses pain in a far more realistic way was issued on 19th December. The Campaign Against Painful Hysteroscopy, which has collected a well of women’s stories, has created a community via their Facebook page and it’s in no small part thanks to their work, supported by sympathetic voices within the BSGE and MPs, that more attention now seems to be paid to pain management.

Clark stressed to me that patient comfort is of the utmost concern for the BSGE, and their newest leaflet is certainly an improvement in ensuring women are fully informed. But the problem is that this information around pain management, and advice on how to mitigate it, is often not communicated to patients by their treating physicians, or mentioned in the leaflet that accompanies their appointment letter. While the option of a general anaesthetic is sometimes mentioned, the leaflets are individual to each hospital and often do not reflect the nuanced guidelines of the BSGE. Most women will simply be given a given a leaflet that makes light of any potential pain and go in trusting that two paracetamol and a stiff upper lip is all that’s required. Clark acknowledges this variation may mean not all women get the full picture: “It’s incumbent on hospitals to make sure their information leaflet is valid, and that they speak to the patient in a clear way.” Most women will trust that their doctors are telling them what they need to know, and not go looking for horror stories on the internet.  

Even women who ask directly about the pain ahead of time report that it’s underplayed by doctors, who tell them that most people “tolerate” the procedure well. “When I asked it if would be painful, the doctor and the assistants smiled at each other and told me women get this done all the time,” says Valentina (34) from London, who prefers not to give her last name as she still needs to go back to complete the procedure after it was too painful to endure without sedation. “I wasn’t given the option to make an informed decision.” This attitude from doctors seems typical: “I was told there would be minimal pain like having a smear, and as I’d had children it wouldn’t be a problem. [The doctor said] a local anaesthetic injection into the neck of the womb would be more painful than the procedure, and would prolong the appointment. I decided to grit my teeth and get on with it,” says Liz Vining (65) from Swansea. She describes her experience as barbaric: “I couldn’t believe what had happened to me in the 21st century. 18 months on I still get tearful remembering it.”

The number of women who report their hysteroscopy to be very painful varies, but a is around 20-30 percent. A 2014 study, whose findings are in line with similar studies, found that 20 percent of women described the pain as “intolerable”, 46 percent said “moderate” and 34 percent said “mild”. The pain is usually worse for women who’ve not given vaginal birth, or who’ve gone through menopause. Clark at the BSGE told me that a study of 1,600 outpatient hysteroscopy patients, soon to be published in the British Medical Journal, found that most women tolerate the procedure well: “The acceptability rates are high, over 90 percent. The pain scores [out of ten] are in the region of three to four.”

But it is important to note that this study was just for diagnostic hysteroscopy—entering the uterus with a camera and looking around—and did not include any biopsies or polyp removals. While talking to Clark I realised that the “looking around” part of my hysteroscopy was indeed a three or a four out of ten, but spiked to a nine only during the biopsy. This distinction during clinical research may explain why so many doctors tell patients that hysteroscopy is “tolerable”, but when I was in the stirrups I experienced it as a single event. Consequently, I felt like the doctors had not been truthful about the prospect of pain. Clark conceded this point: “I agree the biopsy is far more uncomfortable that a well-conducted hysteroscopy.”

Consultant Gynaecologist Edward Morris, Vice President of Clinical Quality for BSGE’s umbrella organisation Royal College Obstetricians and Gynaecologists (RCOG), told me that it’s been important to them to listen to women’s experiences ahead of the new guidelines in 2020: “We are aware of some women reporting that they did not feel well informed about the procedure and their options.” Morris told me that women should discuss concerns about pain with their doctors, as an outpatient procedure (without proper pain relief) isn’t right for everyone: “[For example] if she faints during periods because of pain, if she has experienced severe pain during previous vaginal examinations, if she has previous traumatic experience, or if she prefers not to have this examination while awake”. A 2014 study also found that pain may be worse for women who’ve not given vaginal birth or who’ve gone through menopause.

A chilling fact is that hospitals have actually been financially incentivised to perform outpatient hysteroscopies on women. In 2013, the NHS doubled the rates that hospitals would be paid to perform hysteroscopies as an outpatient procedure, and lowered the rates paid for anaesthetised hysteroscopies. The procedure used to be commonly performed under general anaesthetic, until a shift around 2001 in part due to the influence of NHS’s National Clinical Director for Cancer Sean Duffy. In 2001, in response to comments about outpatient hysteroscopy research, Duffy wrote in the British Medical Journal that while a “small proportion of patients do, undeniably, experience considerable pain”, he concluded that for most patients the “minimal discomfort” is worth the convenience of having an outpatient procedure. “Too much emphasis is put on the issue of pain surrounding outpatient hysteroscopy,” wrote Duffy. “A small proportion of patients do, undeniably, experience considerable pain, but most patients do not, and they trade off the minimal discomfort they experience with the convenience and interaction of outpatient hysteroscopy.”

When MP Lyn Brown spoke in Parliament on 11th December she said the NHS’s Best Practice Tariff system encourages quick-and-easy hysteroscopies in a way that prioritises savings over women’s dignity and humanity. Brown said: “The national target is for the risky outpatient hysteroscopies to increase to 70 percent of the total, up from 59 percent. The Department for Health is not working to reduce pain and trauma for women—it is incentivising hysteroscopies without effective pain relief and is taking our choices away.”

*

Historically, women’s pain is taken less seriously by doctors. One 2001 study found that some doctors believe women have a “natural capacity to endure pain” due to the stresses of childbirth. Deb Drinkwater (56) from Salford says her hysteroscopy took away her dignity, as it left her screaming, crying, and losing consciousness. Drinkwater had previously had a bowel screening, a similar exploration of the back passage where patients are routinely offered sedation (Clark at the BSGE said that colonoscopies and gastrointestinal endoscopies, where the scope goes down the throat, are sedated because the tube goes further into the body and “around bends”). Based on her experiences with both procedures, Drinkwater says she can’t help but wonder if there’s a gender bias: “Colonoscopy is something that both men and women do.”

Drinkwater says she’s really not a wuss: “I know what pain is. I’m not an anxious patient.” But after her hysteroscopy, as she was struggling to stand, she made a nervous joke to the student nurse: “I said, I hope I hadn’t put her off nursing by being in such a state. She said to me, no lie: ‘Don’t worry about it, the woman before you screamed the whole way through it.’”

NHS England performed almost 39,000 “unspecified diagnostic” hysteroscopies last year, and the number is set to rise. 75 percent of women do find having a hysteroscopy bearable, but for the remaining 25 percent who don’t, their experience would be vastly improved if everyone knew in advance they could ask for sedation. If nothing else, being met with understanding when they experience painand an awareness that they’re not weak nor even unusual if they require pain medicationwould go a long way. Katy Wheatley (46) from Leicester initially felt shame and blamed herself for not being able to get through her hysteroscopy, even when the pain sent her into clinical shock. “But when I look back at it—they must have seen it so many times. No one in the room reacted when I went into shock. You could tell it was routine for them—that in this room, this is what happens to women.”

Doc Horn: Making the connection

Hedge Magazine, March 2019. Original article p30-32.

Interview with Doc Horn, Head of Total Return Equities at Pictet Asset Management

Doc Horn, an American in London, loves it here. “In the States, not even in New York, you don’t have the depth of history and cultural diversity of London. It’s so different than anything you can find in any city in the States,” he says – Horn has been living here for seven out of the past nine years, returning to London in the summer of 2017 when the opportunity arose to join Pictet Asset Management as Head of Total Return Equities.

We’ve met in Pictet’s offices in the City, enjoying the view from high up on a cold and sunny winter day. Horn looks sharp in a dark blue suit and green patterned tie, coming across as straight up professional on the topic of work yet open and cheery on other subjects; when they came back to London, he tells me in his mild-mannered way, they lived opposite Hugh Grant in Notting Hill for a time – the ultimate American in London experience.

Horn’s work at Pictet is very much one of being the boss, overseeing total return equity strategies as well as ten small global teams working on different approaches. “What I enjoy most are the conversations I get to have with all these bright minds, and how I get to help them formulate new investment ideas and help them understand risk in their broader portfolio. It’s an incredible opportunity, to be that connector.”

For investors, the choice is to either access the Pictet multi-strategy diversified alpha fund – a “hyper-diversified” fund of 17 strategies with low to no correlation to each other. Or they can pick an individual strategy or region and invest directly: “The idea would be to have numerous differentiated strategies that are focused on either a unique universe of coverage, or style or region of investing.” Three of the single-strategy funds are in Asia – Horn cites the China long-short fund as one of the most compelling strategies in the mix right now. Part of Horn’s job is to identify new strategies – most recently he brought in a specialist in merger arbitrage – that can be added to the mix. They take a long time to hire their managers, says Horn – when they have chosen someone, they invest in them and ensure they have the support of Pictet’s resources. “Then after a time, if we think it’s a viable product that investors would like, and if there’s still capacity or left-over room for more money to come in, then we’ll launch that as a stand-alone fund for investors to access directly.”

Sometimes Pictet will bring in fully formed teams who might have been working together for years, and the ideal approach may well be to pretty much leave them alone. “They know best how their strategy needs to be managed, and the less meddling that we do, the less chance of style-drift,” says Horn, who seems to be relatively hands-off with the process. “We spend a lot of time communicating with the teams, trying to understand the exposures that they have on their positioning, the way they’re thinking about the markets and about risk. We use that to help inform other teams [in the group] and find commonality in exposures or in themes that they’re playing, and connect different teams if necessary.”

Horn says the ideal outcome is when the teams actively work together. “I think that’s a key differentiation from many of our other hedge fund peers. We see collaboration as key to how these teams operate – the whole is greater than sum of its parts,” says Horn. “The knowledge base that exists from a global team [means we have] the ability to share a wealth of data and knowledge, and that is really beneficial to all our investors.”

*

Horn (39) comes from a small mountain town in Colorado. “I grew up raising llamas” – yes it was unusual, and no, they weren’t for any purpose other than fun. “We had several animals, including a few llamas which I was mostly responsible for.” Horn estimates being trusted with this task from about the age of five. “They were a nightmare when they got out of the stable because they don’t like to come back. You’d get the neighbourhood together for a llama search party,” Horn laughs. He left for New Orleans at 18, studying business at Tulane University. He was “fascinated” by finance: “It just made sense to me. But I’d be lying if I said I was getting the Wall Street Journal delivered to my house at the age of fourteen.” The moment of conviction came at university when he took part in the Burkenroad Reports, a securities analysis programme where students became equity research analysts for a semester. “You’d meet with the company management and you do a full buy-sell-hold report. I had a little oil field services company called Trico Marine. … That was the thing that helped me get into equity research.”

Horn moved to New York after school and joined Fulcrum Global Partners. It was an interesting first job: “My first company meeting was with Ken Lay, the Enron CEO, on the same day the Wall Street Journal published the first article about potential accounting issues within Enron. That meeting was a fascinating entrée into the business. Ken was very smooth. He was an incredible speaker and presenter, probably not a fantastic manager in retrospect.” Asked how the experience shaped his view of the world, Horn says it’s imbibed a certain skepticism. Fulcrum continued to tote Enron as as a Buy recommendation after that day: “I was very junior at the time. As the stock dropped day after day, and more bad news came out, we failed to adapt our opinion on Enron to reflect the new facts. We allowed emotions and stubbornness to guide our rating, and it resulted in a poor recommendation to our clients.” It became an important life lesson: “You have to be pragmatic, and you have to cut your losses. Probably one of the things that has helped me succeed as a portfolio manager, and a manger of team, is a real willingness to look at both sides of the argument, and be willing to change my view.”

Before joining Pictet in 2017, Horn spent almost 12 years at UBS O’Connor, which provided exposure to a range of sectors and later, a variety of geographies including his first stint in London as head of the European team. “My career hasn’t been that long, but the cycles have been more compressed. Experiencing 2001, living through 2008, being in Europe during 2011, seeing the many crises and bubbles that have formed along the way. The one commonality in what I’ve been doing is risk awareness, and taking a very market-neutral approach.”

It can be easy to become a superstar for two years, but then flame out and never recover: “You can have five phenomenal years and one terrible year, and everybody will leave you on the side of the road.” Horn describes himself as a “smart risk-taker” who minimises the amount of volatility he’ll allow in his portfolios. Asked if that’s a controversial position, Horn says it’s more rewarded now in the post-2008 world: “Many investors have gravitated towards a much more risk-conscientious mindset in the past decade, and you see fewer hedge-fund cowboys. Our investors are the same way. That’s the mindset that we cater towards.”

Live to fight another day, in other words. Horn and his wife Lauren have four children aged between two and seven, which takes care of the question of what he does outside of work. He likes going out to eat though: “My favourite restaurant in London right now is a small Italian place, it’s looks like a gelato store front in Camden. But when you go in it’s a phenomenal restaurant, a BYOB place with no charm but outstanding food. It’s called Anima e Cuore.” It’s got increasingly hard to get a table there, says Horn, but he’s got a trick for that: “When you have four kids at home, you’re happy eating at 5.30pm when no one else wants a table.”

One last thing. Why do they call him Doc? His full name is Stanford Everett Zachariah Helms Horn. “My dad thought it would be a funny name for a child to have in nursery,” says Horn – it’s what he’s been called since he was a kid. Funnily enough, his brother Cash is the one who became a doctor, and Doc is in the “cash” business. “My parents got the right industries, just the wrong way around,” he laughs.

Everything and its opposite // Interview with Kathryn Joseph

Published in Oh Comely magazine, February 2019. 

Everything and its opposite

There’s so much want in Kathryn Joseph’s music. It’s right there in the title of her new album, “From when I wake the want is” – that feeling that sits there, under the eyes, under the tongue, and there’s nothing you can do except watch as the ache turns into a pleasure. At least that’s how sensations float together in Joseph’s music: “I think you need that sore part to make anything that’s beautiful.”

This is a heartbreak album, but unless I knew that Joseph wrote it in response to lost love I don’t think I would have been able to tell. Joseph leaves such a wide open space in her soundscapes that it could be about anything, as long as you’re willing to meet here there. The title reminds me of that quote by Poe: “Sometimes, I’m terrified of my heart, of its constant hunger for whatever it is it wants; the way it stops and starts.” I’m fascinated by the idea that there’s you and then there’s your heart, or your want – and that your want isn’t necessarily looking out for your best interests.

Joseph’s music seems to come from a place outside of her control: “Songs start off as noises, then I fit the words into it. I don’t really understand it.” The music swells behind the sparse yet sharp lyrics, delivered in Joseph’s sometimes brittle, sometimes cottony, voice. But there’s no self-pity there, as she sings it almost matter-of-factly: “How do I get rid of all this fucking love?” The song soars, creating a sense of floating as the soreness transcends into something almost comforting. You know when you’re experiencing something so intense that it flips over into its opposite? Like when you eat something so extremely sweet that it starts to taste acidic?

I’d been thinking about this for a while, long before I heard Joseph’s song – “From when I wake the want is” was released in August 2018. When I call Joseph at home in Glasgow, a few days after she opened for Neko Case in London, I don’t expect her to necessarily understand what I’m on about, but of course she does: “I am obsessed with the feeling that I am everything and its opposite at all times. It’s what I find almost disturbing about myself. I think my songs are that too.”

The new album follows on from Joseph’s 2015 debut, which won the prestigious Scottish SAY Award. But nothing about her story suggests she was expecting this success, or even really courting it. At 43, you could call Joseph a late bloomer, except that she’s always been making music – just, you know, for herself. “I’d been a waitress since my twenties,” Joseph tells me, describing her new life of making a living from music as something she just didn’t think she’d ever reach. She hated doing the things you need to do in order to get your music out, as it made her feel out of control. And her life before was good: “I loved my job, and I loved that it gave me a safe routine that was good for me. Then I could write however I was feeling it, and it didn’t matter how often I was doing it.” So going pro, if you will, was not ever something she actually planned to do, but then she moved to Glasgow and her neighbour happened to be Marcus Mackay, now her producer. Still, everything about Joseph’s journey has been a hide and seek experience – she recorded the first album without any expectations, and had it not been for the initiative of Claire Mackay, who runs the Hits the Fan label with Marcus, it never would have seen the light of day: “I was so paranoid about it, thinking it wasn’t anything that anyone would be interested in hearing,” she says. “I would never have done anything with it.”

I pause for a moment. I can see the appeal of keeping the thing you’re passionate about “untainted” by keeping it separate from any money-making ventures. But still, most people would be tempted to at least try? Joseph thinks about it. She loved her previous job and the people she was working with – she really liked her life, you know? She tries to explain: “I’ve lived in really beautiful places in Scotland … it made sense to me. It made me feel…” She stops, starts again. “I went to university when I was much younger, and my sister got really ill so I didn’t last long. I remember feeling, ‘I need to feel okay every day.’” This shift in thinking made it hard for Joseph to do things she didn’t like in the hopes of future rewards: “I still don’t feel like I’ve got that ability. Everything I feel is very immediate, and what I react to is very immediate. I’m not into long-term planning.”

Releasing the albums has been a far better experience than she expected, though. “The world has turned out to be a lot nicer than I thought it was going to be!” She laughs. “I love that this is my job now. I love getting to do it.” And it came at the right moment too – Joseph was actually offered a record deal when she was in her 20s, but felt very much out of her depth at the time: “I’m just so glad I waited until I was absolutely sure how the songs should sound and be.”

One of the most delightful things about Joseph’s lyrics is how frank they are – the words are sparse, but all the more effective for it. It’s a surprise at first, to hear these gorgeous, swoony songs liberally sprinkled with the word “fuck”. And not just as a swear word either – these lyrics are pretty sexual at times, describing one of the most fundamental wants. The tenderness of Joseph’s delivery means the songs can carry it, and of course, the weight of age and experience behind these lyrics makes them beautiful, whereas singing about fucking might have just been crude at 22. “I love that word. I use it a lot in real life as well. But I’m aware that I don’t want to use it in front of my child.” Joseph laughs – her daughter is seven years old. “But that’s the thing about being human I love best – I think sex is one of the most beautiful things we get to do as humans. Playing live and fucking are the only times when I don’t think about myself.”

Kathryn Joseph’s album “From when I wake the want is” is out now on Rock Action.

 

The case for the four-day workweek

BL Magazine, January 2019. Original article p54-57.

Sharing the spoils: The case for the four-day workweek

Automation leads to improved efficiency – but who benefits? Until now, the spoils of technological advancement has gone straight to the business bottom line, as staff keep working the same hours no matter how much time is “saved” by technology.

We were supposed to be working 15 hours a week by now, predicted the economist John Maynard Keynes – in 1930 he anticipated that technological advancements in “progressive countries” would mean we’d be enjoying more leisure. But it hasn’t happen, even as data is now automatically input, documents effortlessly shared across devices, reports instantly assembled, and hardware spontaneously alerts us when it needs attention. In spite of warnings that automation will put people out work, Britons put in some of the longest hours in Europe – we rack up £32 billion worth of unpaid overtime, according to a Trades Union Congress (TUC) survey from September.

And people resent working so much. 81% want to work less, the TUC found, and out of those, about half would love to have a four-day workweek. The TUC has thrown its weight behind this idea, calling it a way to ensure productivity gains are distributed fairly. “Bosses and shareholders must not be allowed to hoover up all the gains from new tech for themselves. Working people deserve their fair share,” TUC General Secretary Frances O’Grady said in a statement. “If productivity gains from new technology are even half as good as promised, then the country can afford to make working lives better.”

But working four days per week – while being paid the same as before – would it actually work?

screen shot 2019-01-10 at 15.43.41Initial reports suggest a four-day week may lead to improved productivity, even with fewer hours in the office. When researchers at Auckland University of Technology tracked a four-day workweek initiative at a 240-people-strong trust and estates company, they found that staff were less stressed and reported more motivation and commitment to their work, which in turn resulted in better performance. This makes sense: 12.5 million UK work days were lost last year because of work-related stress, depression or anxiety, according to the Health and Safety Executive, and the single biggest cause was workload.

The four-day workweek isn’t just some futuristic pipe dream. The fact that this idea has been floated at this point in time is no coincidence: we are finally at a point in technological advancement where it might actually be possible. There are already several businesses in the UK who’ve implemented a four-day workweek. The companies BL spoke did have the altruistic goal of sharing the spoils of technological advancement, but they also genuinely believed it serves the business financially.  

For NautoGuide, a digital mapping company in Swindon with five employees, the decision to move to a four-day week in September was motivated out of a desire to have more time to work on strategic goals. “We had a project that we really wanted to deliver long term as an investment, but we never got round to it because we were always firefighting,” says Dave Barter, CEO and Founder of NautoGuide. The company realised the answer wasn’t to have more resources or to be more efficient, but to have more time to think. “When you’re all in the office you never [take that thinking time], because the phone rings, email comes in, and people want things. The only way we could see to achieve that was by taking ourselves out the office.”

The staff at NautoGuide now work regular hours Monday to Thursday, and Barter thinks it’s fostered an appreciation that this is a place where you get rewarded for your good work right now, rather than maybe someday. “I think there’s also a benefit to being seen as having an open and forward-thinking culture, as [clients] see that and understand it will translate to our work too,” says Barter.

Rich Leigh is the Director and Founder of Radioactive PR, a dozen-people-strong public relations company in Gloucester. “I’ve got incredibly happy staff,” says Leigh, who started the four-day workweek initiative six months ago. The company is making more money than ever before, although the initiative has made a difference to the margins as Leigh has had to hire sooner than he probably would have otherwise needed as he doesn’t want to “squeeze five days into four”. The initiative has made the company an attractive place to work, Leigh says: “We get so many CVs. Inevitably we’ll be finding the very best people.”

Becky Simms, CEO and Founder of Reflect Digital, a marketing agency in Kent with a staff of 55, has also found that business has been good since moving to a four-day workweek in October: “We’ve closed the most business and had the most revenue.” The initiative was inspired by a desire for staff to be their best in the office, says Simms – agency work is high pressure: “You’re really worn out by the time you reach the weekend. [The four-day week] was inspired by that buzz you get after three day weekend. Now we can have that time to relax, but still really work hard while we’re in the office.”

*

While these early day experimentations with the four-day workweek are promising, it is very early days – it is hard to say for sure just how this change will affect companies’ bottom line. But while people on the Channel Islands put in just as many long hours, corporations in finance, professional services, and tourism industries may be less inclined to opt for less time in the office as a means of passing on the benefits of automation, at least for now.

The Channel Islands are “not as advanced as the UK in terms of digital transformation, says Pierre Jehan, Client Services Director of Resolution IT, an IT outsourcing specialist in Guernsey. Pointing to the 2,000 vacancies in the Guernsey finance sector alone, Jehan says it’s clear that automation has a role to play in closing this gap: “But with the shortages that they have, employers may be reluctant to offer a day per week off.”

But employees on the Channel Islands are still seeing other benefits of automation and digital transformation passed on to them, with opportunities for remote working and flexible hours: “Automation can also make workers’ lives more enjoyable by taking mundane tasks away and making them more efficient, and letting them concentrate on the nicer things in their jobs.” Jehan strongly believes in rewarding the people who create the savings – if a department comes up with new methods for saving hours, they should directly benefit from it. “Companies, in whatever sector, should empower staff to use these technologies in order to become more efficient and innovative through digital transformation. And in the same breath, they should reward their staff for doing so.”

While agreeing that Channel Island companies should be looking to robotic process automation or AI to help fill the worker shortages, Justin Bellinger, Chief Digital Officer of Channel Islands telecommunications supplier Sure thinks there are fundamental issues that needs addressing before the four-day workweek will make it onto the agenda. This will include tutoring and retraining: “We need to work out what machines can do that will benefit our businesses. What do I want my people doing it instead of manual input? The answer will be more interpersonal skills and emotional intelligence – things that will add value beyond the basic grind.”

This has already started happening on the Channel Islands, says Bellinger, pointing to the fund insurance and trust sectors: “As we come under ever-increasing regulatory scrutiny in the financial services sector, I firmly believe that regulators will start to automate compliance. … We’ve already started to see that in the gaming industry.”

The proponents of the four day workweek have an uphill battle ahead to convince business leaders that more time away from the desk could actually mean better overall job performance. “But how long that person has spent at their desk is a false way of looking at productivity. We’re not working at cotton mills anymore,” says Bellinger. Most people can only focus for five or six hours per day before fatigue sets in and quality starts to decline; when a Swedish retirement home ran a six-hour workday experiment in 2016, they found that nurses were less stressed, got sick less often, and had more energy to spend on quality interactions with their patients. It’s a fallacy to think that keeping people at work automatically means getting more out of them.” Research backs this up – most people can only focus for five or six hours per day before fatigue sets in, so it’s a fallacy to think that keeping people in the office automatically means getting more out of them.

For Rich Leigh, the change to a four-day workweek has had the benefit of positioning his company as forward-looking and innovative. “We’ve had clients come to us as a direct result of this, saying they we like the fact that we don’t just talk the talk, but walk the walk too.” Ultimately, Leigh cares about ensuring his staff are happy: “These are people you spend the majority of your life with. Why wouldn’t you want to give them the best time that you can?”