Gervais Williams agreed to meet me for lunch at a brasserie around the corner from his offices in the shadow of St Paul’s Cathedral. From here it’s a stone’s throw to the London Stock Exchange on Paternoster Square. In his 30 year career in the City (he was an engineer before that) Gervais has been a huge advocate for investing in one of the exchange’s most exciting and occasionally controversial offshoots - the Alternative Investment Market - and it’s our main topic of conversation.
It’s not uncommon to come across fund managers with strong views about investing methodologies. But this is a man with utter conviction in the value of investing in smaller companies. They’ve been a regular source of outperformance for him: first during a long spell at Gartmore and now during five years as Managing Director of Miton Group plc. But more than that, in the aftermath of a protracted credit bubble, he predicts a certain resurgence for small-caps. He also believes that fund managers could and should be allocating more capital to the very best home-grown firms, not just for clients but for the sake of everyone.
Gervais, what’s does a regular day for you and your team at Miton look like?
Well, I take an hour’s walk to the office. The whole team meets to review results on the screen at 7.00am and there tends to be a lot of discussion about upgrades and downgrades. By around 9.00am we’re usually doing face-to-face meetings with corporates. Last month [March 2016], Miton, which includes my team as well as Europe and the US, did over 140 meetings with corporates.
The best part of the process is meeting companies and making decisions. We can use sophisticated models and pick up new trends coming through, but there is nothing better than talking to the companies themselves. I probably see more companies than anyone else, in between reviewing portfolios, meeting clients and looking at new challenges that are coming up.
You literally wrote the book - The Future is Small - on why smaller companies hold such strong investment appeal. Can you tell me about your thoughts on why that is?
As we all know, the long-term purpose of investing is to allocate our collective savings to the best and most productive companies. One of the problems is that when…
