저자: NickTrain · 외국인
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Nick Train은 Finsbury Growth & Income의 25년 운용 경험을 소개하며 장기 집중·저회전 전략을 강조한다. 과거 Cadbury, Irn-Bru, Diageo, LSEG, RELX 등에서 성과를 냈다고 밝히고, 최근 장기 부진에 대해 단기 투자자 관점과 기업 본질에 대한 확신으로 설명한다. 연속성 투표는 이사회 결정이며 본인은 이해상충 우려로 의결권 행사를 하지 않는다고 말한다. 영국 기업들이 성장 투자가 부족했다고 지적하고 미국 기술 기업의 성장 투자를 높이 평가한다. 엔비디아는 기회이나 리스크도 있다고 언급하며 특정 방향 예측은 하지 않는다.
다듬은 글
Hello, I'm pleased to be joined by Nick Train from the Finsby Growth and Income Trust. So Nick, great to see you. Hope you're well. I am extremely well, thank you. Raring to go for a new year. So it's been a hundred years since Finsby Growth and Income launched. How has the investment process actually changed during all those years?
Well, Dan, I I must admit I'm not um a historian of um the hundred years of Finsbury's uh uh existence, but uh I I have to say I think it is worthy of note that I myself have been responsible for the investment affairs of that company for a quarter of a century, which if my math is correct means that that's a quarter of the entire history of the company has been down to me and my colleagues.
The previous manager had a very very different style. My recollection is that it was small cap growth oriented but with high levels of portfolio turnover. And for those of you who know anything about us, it's completely the opposite. We're kind of big company but with a growth tilt, very concentrated and very very low turnover.
So whatever it is, we're pretty much the mirror image of the of the previous the previous manager. So what would you say are your biggest victories since you took over running this trust? been really influenced by Warren Buffett and Charlie Munger by by Bacher Hathaway and I I I'm proud of the fact that for at least the first 20 or 21 years, we did really well out of um long-term ownership of uh beloved consumer brands, you know, and that's a big Buffett theme or it was a big Buffett theme, Coca-Cola, brands like that.
And you know when I look back at the the track record for Finsbury, we made a lot of money for investors in Cadbury. We made a lot of money for investors in Iron Brew ag um kind of the Coke of Scotland. Um we made a lot of money in Diagio as well for at least the first 22 or 23 years. We know what's happened to Diagio more recently.
I'm going to just name a couple more if I may. So pleased and proud that we recognized that London Stock Exchange Group and Rellex were and still are two London listed kind of data tech type businesses with just incredible growth opportunities. We've owned both of those for over 20 years. They've been big drivers of our returns and I think those two businesses are just getting started really.
What would you say your biggest mistakes have been? I guess every fund manager can't expect to do well all the time every single year. Well, yeah. No, I've been doing it long enough to to to I can show you the scars from from that. An archetypal mistake for us. for me, let's be let's be personal about it.
Um, that shows the best and maybe the worst of our sort of approach to the investment challenge. I owned Pearson for 17 years and through that 17-year peri that's patient. Yeah, I said earlier we're patient. We were waiting for Pearson to demonstrate that it could turn itself into the sort of business that I've just mentioned, Relex, that Pearson maybe was going to be able to turn itself into a a digital growth business like Relics.
And for a variety of reasons, I don't really think it was the company's fault. It's more the sector it was in. That just didn't happen. But in hindsight, maybe it would have been better to have given up on that idea after 5 years rather than waiting for 17. Um, is that a mistake? I don't know. Patience is a virtue, but sometimes you can be patient to a fault and and maybe we were there.
I I don't know. So, obviously you've had a period of underperformance more recently. What's the board of Finsby Growth and Income actually done to challenge you about this? Have they said you're picking the wrong stocks or do you want to try something different? Yeah. Listen, taking a step back, um this the question you ask to me this is why investment trusts are such attractive vehicles for private investors that unlike you know a unit trust or a mutual fund, there is an independent board and that board is mandated to do whatever it can to maximize value for the underlying shareholders.
got shareholders backs and I always think that's a very reassuring aspect of an investment of an investment trust. The Finsbury board um has got a number of well I'd say all of them have got a different set of experiences andor expertises relating to industry and relating to investments and they definitely have points of view and you know as directors of let's be candid about it an underperforming investment trust there is pressure on them and they need to be seen to be responsive to that and doing whatever they can to make things improve.
Um what what I would say um with the the Finsbury board is that that board understands p clearly that Lindsil train has a disciplined clear investment approach that we've implemented for a quarter of a century and they're not asking us to change what we do. they have quite rightly challenged us on individual holdings that haven't been working.
Um, but I think ultimately, if I may speak for the board, and perhaps I shouldn't, but if I'm speaking for the board, I would say that the board's pressure on me is to do the very best we possibly can within the disciplines that we've explained to Shareholders that we're going to stick to. and the border have been very supportive.
Um I think you've got a continuation vote. What why haven't we had one until now? It just is that because the long-term record under your management has actually been very good. So no one's really worried about it, but you know I'm just wondering what's been the obviously the is the trigger for this continuation vote the persistent underperformance more recently.
Yeah. Yeah. essentially. I mean, listen, I I think that this decision and of course it's a board's decision and I I I need to be careful what I say really because it really is within their their domain this decision. But from my perspective, what I've said to the board is that I think that calling this continuation vote, this is good corporate governance.
The board has publicly said they support our investment approach, but they wanted to establish whether shareholders agreed that this investment approach should continue. Um by calling the continuation vote, it's given an opportunity for shareholders to have a big think and also to engage with the board and there has been quite a lot of engagement between shareholders and the board and I think you know that that is commendable.
I want to say just one other thing about the the continuation vote. I said I thought it was good governance. Um, I just want to be clear. Um, I personally own quite a big percentage of this company. Um, but I have decided, I must admit, with the advice of our compliance officer, I've decided that I'm not voting my shares on the continuation vote.
I I just felt uncomfortable that there could be a perceived conflict of interest if if I was voting to continue the existence of a company where we have a commercial relationship. I I thought it was better that shareholders who are not service providers actually determine the future of the company. I don't want anybody to construe the fact that I'm not voting as that somehow I don't care or I'm not committed.
So let's talk about the underperformance recently. Is this is this down to you being invested in certain companies and the market either misunderstanding what these companies are doing and therefore their the share price is sort of drifting or is it actually these companies have made mistakes but you've held on to them?
I it's probably a a combination. Every investment manager, every active investment manager has got to believe that there is a an inefficiency in the valuation or pricing of shares that they can take advantage of because if an active manager can't identify what inefficiency they're trying to exploit, what are they doing?
Do you do you know what I mean? And I would say, and this goes back to my comment about Buffett, what I would say is that, forgive if it sounds trit, but we think that most investors time horizons are too short. They're too focused on short-term good business performance or bad business performance.
Um, and that short-term focus leaves value on the table for people like us or maybe Buffett who are prepared to say, I'm not really that interested about how the business is doing over, you know, the next year. What I'm interested in is is this a truly enduring business with truly great franchises or brands?
because if I'm right in that analysis, over time, I'm I'm going to capture all of the value that the short-term traders leave leave on the table. And I I would say for me at least I want to believe this that our underperformance is relates to to to that factor that that there there are short-term issues that investors are focused on but they are fundamentally underestimating the durability and long-term prosperity of the the companies we're invested in.
Now I will say um nothing goes up in a straight line. No business does, no share price does. And I will also say that sometimes even outstanding companies do make mistakes or go through a tough time. Our response in situations like that is not to say we're going to sell. Um, our response is to, um, hope and try and confirm to ourselves that we're invested in franchises that are strong enough to get through those sorts of of more difficult episodes.
Maybe we'll try and buy more when they're they're out of favor. And that's worked in the past. I I have one more thing to say, and I think it's really important. Um, you know, the UK stock market had a better year last year. Let sadly we didn't participate as much as I would like to have done. Um, let's hope that that continues.
But for it to continue to me, you say, have companies made mistakes? I I think if there is a mistake that UK companies have made over the last decade maybe 15 years is they've not invested enough in their growth opportunities. US corporations they go all in on growth and we can see the wonderful things that's happened to NASDAQ as a result of that confidence and commitment to growth.
A lot of the work we do is encouraging the companies that we're invested in to invest more for growth because that's where the real long-term value is. I mean, lots of people say it's, you know, if if you're good at investing, buying is fairly straightforward, but the hard part is knowing when to sell a share.
I mean, what what's your take on obviously you're you're the you're potentially one of the most patient investors I've ever come across, but why I'll take it as a compliment. It might it might not be. Yeah, it might not. Sometimes you can be patient to a fault. I have to, you know, you have to acknowledge it.
But but yes, but if you can see a company that's going through a difficult period and clearly it might be a couple of years before it could sort out a big problem, why wouldn't you sell, sit on the sidelines and see evidence that it can fix it, then buy in rather than suffer pain potentially for a long time.
Well, I listen, I agree with your opening gambit that I mean, I've been doing this well over 40 years and to me selling is the the central challenge and the most difficult challenge of all. We have sold I mentioned we we we actually sold Pearson in the end. Uh and so we will sell if the fundamental thesis, the fundamental reason that we invested in the first place turns out to be misplaced.
But I have to say that hasn't happened very often for us. And that could be good or ill. I'm not saying, but it just doesn't happen very often for us because we're very very very careful before we make an investment that we think that the thesis really is a um an enduring one. Um why not why not sit out on the sidelines for a couple of years?
Well, let's just say and this is why it's so difficult. Um let's just say takeovers tend to happen when companies are going through tough times. So, so you know, lots of people have remorse about selling things at low prices because that's when things tend to happen. Um, it's also true that the recovery in a business almost always comes after the share price has begun to go up.
And so that's what makes selling so difficult. And you know, maybe it's a copout, but as I say, to the extent that we can, and of course, we have to be cognizant of what share prices are doing, what people are saying about businesses, but we we're trying to ignore the share price and focus on the caliber of the franchise that we're invested in.
As long as that seems to us to be robust, then that difficult time, for us anyway, is more likely to be a buying opportunity than anything else. So investors have a choice. They can either if they want to buy a fund, they can buy a tracker fund and just simply do what the market does or they can buy an actively managed fund such as the one you're doing.
Traditionally, they'll pay a slightly higher fee for active management because they want to beat the market. But also the even the definition of active management for for you as a fund manager to do quite a lot of stuff. Um well certainly that's that's a sort of the suggestion or people expectation.
Do you think that actually your because your turnover is so low would imply that you're not being truly active. Do you think actually from the underperformance we've seen from the trust in recent years maybe it's time to do a bit more shorten the holding periods you know when you make a good return on a stock bank that money find the next idea.
You must have a shopping list of potential ideas. you know, longer than my arm. I would have thought you heard of sellers remorse. I mean, selling out of good businesses just because they've had a strong run. I mean, there's buyers remorse. There is also sellers remorse. Yeah. I mean, imagine what you felt if you'd sold out of Microsoft in 2004 and weren't smart enough to buy it back.
You know, imagine, you know, if you'd sold out of McDonald's. I mean, these things that go on and on and on, and that's that's what we're trying to do, to find things that can go on and on and on. Um, and I I suppose I've got two answers, two two supplementary comments on this. I mean so so activity I mean that has a that can mean just the level of turnover but you also know there's a technical term portfolio activity which is how different you are how different you are from the market you know Finsbury we we've got over 50% of the portfolio invested in a range of digital advantaged companies like right move in our opinion um that have major major opportunities ahead of them to grow that roughly 50% slightly over 50% of Finsbury invests in those digital type businesses a Relax an Else an Experian their value or their weight in the UK stock market is about six%.
So, so we we're offering investors something radically different radically different from the shape of the market. So, so yeah, we're not wheeling and dealing and buying and selling, but but but but there is something very very differentiated that's that's been offered. And listen, the other the other thing I'd say, and it I think I'm just repeating myself here, is um a lot of investors, both professionals and private investors, I know a lot of investors say, "Oh, um I I invest for the very long term in good companies." actually when you look at what they actually do um that they they don't invest necessarily that long they do get bounced out they do diversify their portfolio by investing in stuff for a punt you know on a recovery I mean at the very very least I would say that what we we we really are taking a very very long-term view and it really is a concentrated portfolio on exceptional businesses.
And [snorts] I I hope that that has a value. I hope that that has a value to investors. But listen, I totally totally get it. We we've got to demonstrate that the way we approach this investment challenge can deliver some performance again and soon. Let's hope it [snorts] started today. That's what I tell myself every morning.
Today is the day that the performance improves. One day that will be true. I guess if you're heavily influenced by Warren Buffett, he he liked to own actual he wanted to own the whole company. He wasn't didn't want to own a little tiny bit, isn't it? Do do you see yourself in in sort of you could do as much as you can with Finsbury?
So you're different to other funds in a way but different maybe not better but different. I mean yeah I mean everything we own I'd like to own the whole company. everything we own. I'd like to think my family owned that business and we're going to own it for the next 50 years. That that that's that's the hurdle to make an investment for us.
And I think it's the right set of questions to ask. You know, would I be comfortable? You know, I've been saying to people recently and and listen, you know, we've not got Nvidia right. I I but but if someone said to you you had to put your entire personal wealth into one company and hold it for the next 20 years and you weren't allowed to sell from today, would you choose Nvidia or would you choose Diagio?
It's not as easy as you might think. Nvidia obviously it's changing the world, but things happen quickly in that tech industry and sometimes bad things happen. I'm not predicting it. I'm just saying, you know, it's worth it's worth considering. And um [snorts] yeah, maybe maybe we we end on reiterating that um [snorts] as long as you keep drinking the Guinness 00 and he keeps drinking the the full fat stuff at the very least Guinness is is is going to power on.
Well, Nick Train, thank you ever so much for joining us. It's been fascinating to talk to you. Thanks, Dan.
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