In this series of profiles, we ask leading fund managers to reveal everything from their investment strategy, to their views on cryptocurrencies, famous business leaders they look up to, and what they’d never invest in.
This time our interviewee is Mike Pinggera, manager of the Morningstar 5-star rated Sanlam Multi-Strategy Fund.
1. As a multi strategy fund how are you positioned as we approach the end of 2021, and why?
Going into Q4 we have around 19% in global equity indices, 30% in listed real assets and the balance in short duration credit. Our equity allocation can adjust very quickly and has been coming down in recent weeks as volatility has picked up. We have extended our duration slightly and picked up yield as we reinvested two maturing bonds. Our long-term thematic strategy has remained stable throughout the year and we are not looking to make any significant changes.
2. What's the biggest economic or macro risk right now?
The authorities around the world a grappling with a multitude of issues. They are trying to manage natural events such as the Covid-19 pandemic with financial support and stimulus, alongside economic factors like inflation and at the same time pursuing both social and environmental agendas. The risk of policy error or errors is a concern, and it creates a challenging backdrop for investors in all asset classes.
3. Describe your investment strategy
As the name suggests it’s a multi strategy fund which we manage with a simple philosophy of “participate when you can and defend when you need to”. In practice we have three underlying strategies. A rules-based equity allocation process that dynamically invests in equity index options and futures. A short duration fixed income portfolio and a long-term thematic strategy focussed on real assets.
4. Which famous investor or business professional do you look up to, and why?
I’ve never been one to look for outside inspiration. I prefer to tackle problems and opportunities with the people I work with. We learn from our own successes and failures.
5. Name your favourite forever stock(s)
My main equity exposure is via index futures so there’s no room for favourites. However, within my real assets strategy I hold two companies that have been in my portfolios for a very long time. The longest position that I’ve owned is the listed infrastructure business HICL. I bought it at IPO in 1996. 3i Infrastructure came shortly afterwards and both have been permanent features since.
6. What would you never invest in?
Anything we don’t or can’t understand.
7. Growth or value?
My main equity exposure is via index futures, so I don’t have a particularly strong view either way. In my thematic real asset strategy I simply look for companies that I can own for 10 years plus and I accept that along the way there will be times when they are rich and times when they are cheap.
8. House or pension?
You need both.
9. What are your thoughts on crypto?
Well, I’ve thought about it, but in reality, it doesn’t fit with my mandate, so I’ll just leave it to the billionaires and the smart kids.
10. What can be done to increase diversity in the fund management industry?
Diversity is a challenge in fund management and the broader finance sector. In Sanlam’s home market, South Africa, they tackled the problem by sponsoring/partnering maths and actuarial programs at several universities and fund talented students through their education. They also have an extensive graduate recruitment programme that focuses specifically on diversity. A number of senior positions in the firm are held by individuals who came through these programmes. Sanlam also runs several awareness initiatives around diversity, ensuring its culture fosters diversity and inclusion. I think education, mentoring and time are the factors most likely to succeed
11. Please give an example of how you’ve engaged with a company you invested in where you were particularly proud of the outcome? (Or disappointed!)
When it comes to engagement we should be playing “Fund Manager Bingo”! In the past six months I had more than forty company meetings and some of these are companies I’ve held for many years. We have always spent time “engaging” with the companies we invest in, but I’m not sure I’d ever use the word “proud”. The most pleasing engagements are when we meet a company for the first time, invest and then continue to engage as they deliver on their business plans.
12. Best bit of advice you’ve ever been given?
“It’s nice to be nice” always springs to mind, but I think my favourite is “the best investments you make tend to be the ones you hold the longest” this goes for your husband or wife and your friends well as your portfolio.
13. What would you do if you weren’t a fund a manager?
Who knows, over the past 30 years I’ve just tried to do my best every day and I’ve taken opportunities when they’ve presented themselves. The path was as much luck as judgement, but discipline has been a key feature all the way through so maybe something that requires a firm hand, like a school lollipop man!
