Can the Tech Rally Continue?

Holly Black: Welcome to the Morningstar Investment Conference 2021. I'm Holly Black. With me is Ben Rogoff from Polar Capital Technology Fund.

Hello.

Ben Rogoff: Hi.

Black: So Ben, I felt like this is a question we've maybe been asking for a few years, but I'm going to ask it, can the tech rally keep going?

Rogoff: Well, I'm, we've obviously done well, as a sector for the last decade, we've been disrupting traditional industries, we've been building new ones, you know, smartphones, cloud and the internet, really being commercialised. And obviously, the pandemic, as tragic as it's been, has been a boon for tech companies. So it's quite right and fair to ask, can we do well post-pandemic, and I think that, you know, inevitably, other sectors will have a really good time of it. As economies reopen, stimulus checks are being spent, there's a lot of pent up demand for a lot of things out there. So maybe for a year or 18 months, tech growth will look less exceptional than it has done for the last decade. But that doesn't change anything, and it doesn't change the medium-term outlook for my companies, as we digitise and continue to drive technology deeper. So no, I think the tech sector can continue to do really well.

Black: And you spoke in your session earlier about how last year was a real test for tech and tech companies, and most of them rose to the challenge. Were you surprised by that?

Rogoff: Well, I guess I have to say, I wasn't surprised, I was very relieved that, with the traffic that was being put on networks, in the home for streaming video and computer gaming, and all the business critical stuff. I mean, nothing fell over. I mean, not really. So like wartime it was an incredible testbed, as you say, for the technologies that underpin the world really. And no one will write songs about that, when they do the history of the pandemic, I hope they find some space for the cloud, because it really has been the infrastructure layer that has kept the world spinning during this pandemic.

Black: And if we think about where we go from here, something you quite firmly believe is we're not going back to the office. And what does that mean for your portfolio?

Rogoff: Well, I think we are all going back to the office, but we're going to do it in a sort of stratified way. So there'll be, work done at home and perhaps focus work and work that's done in the office for building culture and serendipity, the chance meeting with somebody by the water cooler, whatever they call it in America. So, I think that hybrid model is what will ultimately come out of the pandemic. I think it has huge implications for lots of industries. But I think from my perspective, as a tech guy, it really has opened the door to a bunch of industries that have been really impenetrable to technology. If you think about, food, you know, if I'm going to be at home, or I might enjoy cooking. And so for example, the portfolio HelloFresh is one example of a company that's really going after the food opportunities trillions of dollars of opportunity. And I think the same applies to areas like health care, education, government and others, that the tech sector could really help get into with a new work modality in place.

Black: And the title of your session today was the next wave of disruptors, is that where they're coming from?

Rogoff: Yes, I think so. Ultimately, the hybrid work model is one thing, it kind of creates an opportunity, because as behaviours change, so it becomes possible for new companies to satisfy those models. And I think that's one thing. The second thing, as we spend more time in digital channels, if you're not with your doctor face to face, but you're having a session with her on a telemedicine, or if you're doing a board meeting remotely, but no longer physical, then those interactions are on digital and those digital interactions become analyzable. And it creates an enormous amount of content, of data. And we know that machines love data. And so it's like pouring oil for them. And as you do that, and as you pour more and more oil in through these machine learning technologies, I think you can get incredible outcomes. And so I see the the digitization, if you like, of the world and our interactions, as really providing the oil for AI. And that will I believe open a kind of a whole new wave and a whole bunch of new industries for us to disrupt.

Black: So Ben, as a tech manager, I want to ask, what's the one bit of tech that you can't do without?

Rogoff: I couldn't do without any of them. I suppose my smartphone is in the end, the most important thing. I think on average we look at our smartphones 100 times a day. And actually, as I was wandering in the studio earlier, I thought, it's interesting, we used to buy torches, but now that torch is on my phone. We used to buy maps, and now that map is on my phone, and we used to buy board games, and so on we go. 2 billion people globally or thereabouts, use their phones to play games. So the smartphone is ultimately the conduit for change. And for me on a personal level, it's the one I really couldn't do without.

Black: Well, thank you so much for your time. And thanks for joining us.