Cast your eyes back, if you are able, four decades ago to the year of 1986. England were getting dumped out of the World Cup by the ‘hand of god’, Top Gun was leading the way in the summer box office takings, and Halley’s Comet came into view for the first time since 1910.
It was also the year Rob Burdett, head of multi-manager at Nedgroup Investments, was taking his first steps into the world of investments. As part of his A-level studies, a youthful Burdett entered with his classmates into a schools competition called Stockpiler, where they battled against 2,000 other schools to earn the highest return on a fictitious £50,000 portfolio.
The result? Well, it was very much top decile, with Burdett’s class ranking eighth overall, and the prize of a Parker pen, which he still has to this day. More importantly the competition captured the imagination of Burdett and is what started him on the path to his subsequent career in the multi-manager world.
“It was an interesting time in markets,” he said. “Everything was getting privatised, meaning stockmarkets were constantly in the news, and I was just trying to pay attention to it all.”
First steps
In the same year, Burdett took his first steps into the world of wealth management when he took on the role as a trainee stockbroker at Credit Suisse Buckmaster & Moore in his hometown of Peterborough. Then, having worked at the firm for five years and getting his professional exams under his belt, it was joining Berry Asset Management where, under the tutelage of Jamie Berry, his London career began in earnest. Five years later, Rothschild came calling, which Burdett calls the next “pivotal” moment in his career.
“They [Rothschild] had just converted an MPS into one of the first multi-manager services and were promoting it to IFAs for the first time,” he said. “I had really enjoyed my time at Berry and it took some convincing for me to move, but I was really drawn to the appeal of multi-manager funds of funds.”
It was also at Rothschild that Burdett met the three colleagues he would subsequently work with for the next 25-30 years; Kelly Prior, Paul Green, and a certain Gary Potter.
“Since day one at Berry I have always been involved in running client portfolios, but under slightly different guises,” Burdett said. “Initially I was picking stocks myself, but I increasingly realised in meeting fund managers who had all the dedicated resources they needed, that they were always going to do it better than me.
“It ultimately convinced me that portfolios of funds were a good way for people to earn returns on their money, and that’s before you get to all the inherent tax advantages and the benefits of scaling.”
See also: The Asset Allocator Diary: Rob Burdett
From Rothschild, Burdett and the multi-manager team left for join Credit Suisse in 2001, and then six years later he and Potter became founding partners of Thames River Multi-Capital in 2007. Here he spent 17 years managing the funds and team through several changes of ownership culminating in the Columbia Threadneedle Multi-Manager LLP entity, where assets peaked at £3.3bn.
Over such a long period of time, Burdett and the team have seen a number of major corrections in markets, from the lows in 2003, to the global financial crisis (GFC) in 2008 and, most recently, the Covid pandemic, so what has he drawn from these experiences and what are the skills needed to be a successful investor?
“The most important thing to remember when running money is that we are looking after someone’s life savings, and that drives everything we do,” he said. “Just before coming into this interview I was signing off an investment note to wealth managers within Nedgroup about recent market volatility which had led portfolios to drop, and we want to give them what they needed for reassuring the ultimate client.
“It’s all about time in the markets, not timing the markets, so if we can inform people before they call us in panic, it helps them stay invested. Pretty much every year you get at least a 10% correction in the market, and it’s this sharp frost that brings on the new growth. It feels awful when you are going through it, and can cause panic, and we have seen the surveys of investors buying high and selling low, and this can apply to professionals as well as individuals, so the key is communication.”
The ‘seven-year rule’
Another quality important to Burdett is to be forward looking and cutting through, or avoiding hubris when talking to fund managers. When it comes to being forward looking, having spent a lot of time trying to work out what it means to be a genuine long-term investor, Burdett has settled on what he calls the ‘seven year rule’.
“There is no real definition of an investment or economic cycle, but a lot of theories lead you to at least five years, maybe 10,” he said. “I did a lot of work around seven years, and pretty much every day is a good day to invest if you have seven years or more as an investment horizon.
“I guess this is specific to my 30-year history in markets, but in all those corrections we have seen in that time if you are an unlucky investor and put money into the market the day before the sell-off, on a seven-year view you have enough time to recover.”
When it comes to building a portfolio to provide that ability to recover, and also grow, Burdett is not, and has not been for the past two decades, a subscriber to the 60/40 approach to diversify assets. Instead, he has long held up to one-third of his portfolios in alternatives, or absolute return assets, to achieve uncorrelated returns.
“This was a key component for us in the GFC, when we held a number of assets that were counter or acyclical, such as care homes in the property space, which provided genuine diversification when either bonds or equities fell,” he said.
A modern multi-asset solution
Having left Columbia Threadneedle in April 2024, it didn’t take long for Burdett to resurface when he joined Nedgroup Investments in October to head the South African group’s international multi-manager business. So, what drew him to Nedgroup, and what can we expect going forward?
“There’s a real boutique flavour here that appeals to me,” he said. “There is an existing client base here, but there is a desire to offer what we run for our internal clients to the rest of the market, and that is where I have some reasonable experience in my career.”
See also: The PA Adviser Profile: Past, present and future with Yoram Lustig
As it stands today, Burdett and the team currently manage some $1.3bn of assets for internal clients, across three Dublin funds and a discretionary management service (DMS), which in theory he said means they can offer multiple types of solutions in the future.
“I have inherited a largely younger team, and they have been brilliantly positioned in terms of asset allocation,” he said. “They have been overweight in equities, overweight in the US, and overweight in growth.
“However, of their own accord, and encouraged by me since my arrival in October, they have now been questioning if these overweight positions have run too far? This led to the most recent asset allocation shift, which was to reduce the US and favour Europe, which to date has worked out well.”
In terms of building out its proposition to external clients, Burdett said Nedgroup has already begun market research to hear what advisers want from a modern multi-asset solution.
“We’ve got all the ingredients here, the difficulty is getting the right product or solution to the market, and that is what we are doing right now.”
With over three decades of experience in the multi-asset space, and a reputation for being one of the most respected figures within the industry, it’s a case of one to watch with interest
Indeed, Burdett said if he hadn’t got into the investment in duty, his fallback career would have been an architect. With a track record of building successful multi-asset solutions everywhere he has been, some might argue he has been doing both jobs anyway.
