The value of the pound

[inogen]

How do you know how the pound falling affects him personally? Please explain beyond just highlighting that he's got a stake and likely investment in the funds of an EM fund management company.

It's not "likely". He's had a return of £7m on his investment in SCM since the Brexit vote. Plus his £15kpcm salary.

He part owns a company that specialises in overseas investment. If he's not making money from the pound tanking, for himself and the other investors, he's not doing his job.

A job, which by the way, he's gone on public record to say how well he does.

 

[dowie]

It's not "likely". He's had a return of £7m on his investment in SCM since the Brexit vote. Plus his £15kpcm salary.

He part owns a company that specialises in overseas investment. If he's not making money from the pound tanking, for himself and the other investors, he's not doing his job.

A job, which by the way, he's gone on public record to say how well he does.

Are you just going to ignore the posts you're quoting or do you not understand them?

All you've done is just highlight that he's made some money from a stake in an investment company and likely has invested in some of their funds.

You don't know how much he's got invested in there (if at all, though he likely does) or how much he's made - I think you're conflating an ownership stake in the management company itself with the funds when you referred to my use of the word likely.

You're referring to his job but he's not involved in the management of funds at the company and hasn't been for some time now, he retained a set on the executive committee while as a back bencher (he's recently stepped down from that role too) but he's not been a PM there for years now!

 

[mattx2]

I don’t think anyone is suggesting that they aren’t investing in the fundamentals of specific businesses — just that the falling pound adds to any profits they make when converted back into GBP.

I said in one of my earliest posts that they will no doubt hedge against currency fluctuations, but I would be surprised if the hedge negated the entirety of the ‘benefit’ — have I got that wrong?

It's possible the way these funds are set up sometimes is with a seprate shareclass for each currency invested. Which are 100% hedged back to base currency. So baring any small hedging costs an investor that paid in GBP would get the same returns as someone that paid in USD or YEN etc.

As for JRM we don't really have any idea if hes invested into a hedged class or not. In fact most of his income wont come from investment gains but the slice of AUM his company takes in fees and performance fees.

The only way to grow those is to constantly out perform the benchmark. Which Brexit has little impact on it may actually make it harder to attract european or other overseas investors depending on what rules get implemented.

Infact with his dublin domiciled funds he could be in the odd position of not been able to invest in his own funds if the UK doesn't allow passporting for ucits funds. Which would also be the case for lots of large uk asset managers

 

[toshj]

It's not "likely". He's had a return of £7m on his investment in SCM since the Brexit vote. Plus his £15kpcm salary.

He part owns a company that specialises in overseas investment. If he's not making money from the pound tanking, for himself and the other investors, he's not doing his job.

A job, which by the way, he's gone on public record to say how well he does.

As far as I can tell, Somerset Capital is a long only EM equity fund. That's their strategy. Whether sterling is performing to a basket of other currencies is really not their concern.

I think certain people - with a fundamental misunderstanding of financial markets - are looking for a story here where there isn't one.

I genuinely dislike the man and find some of his views abhorrent, but his involvement in this fund doesn't have any link to undermining GBP on a political level.

However, knowing what's occurring, it's very likely that he's invested his personal assets in funds that short UK industries, financials, RE and other assets. He's probably balls deep in Odey's L/S fund. But then most investors are wary of being long UK PLC at present.

 

[Irish_Tom]

Well it isn't irrelevant... so essentially your argument re: the property is an unrealised loss can be ignored here - as for profiting later that relies on the post-brexit economy doing rather well down the line relative to if we'd not left!

Isn’t that literally the Brexiters’ argument for Brexit?

The argument re: the liquid assets is - you don't know. Essentially there is no basis for the claim. Your presumption re: the hedge doesn't matter too much either way as even if completely unhedged you still don't know how much has been allocated to those funds in the first place!

For someone who’s argument rests on ‘we don’t know’, you’re coming across as though you think you do know and you think I’m wrong.

So far you're happy with an unrealised loss on GBP based illiquid property assets, that can apparently be ignored, but a stake in an EM fund which may or may not have been hedge efficiently against currency risk is the reason for a claim that he's profited from Brexit despite not knowing how much he's got invested in the fund itself or what other investments he's got that might well also have been affected either way.

As I said before, unless his property has actually fallen in value in GBP or he intends to convert those assets into overseas assets then it’s not a loss, unrealised or otherwise — but as you keep saying, we don’t know. However, you seem pretty sure that the rest of his portfolio is net-negative — what are you basing that assumption on?

It is a nonsense argument so far yet I still keep on getting quotes about it.

I mean, I quoted someone else and you replied on their behalf so I thought you were enjoying yourself? *shrugs*

It's possible the way these funds are set up sometimes is with a seprate shareclass for each currency invested. Which are 100% hedged back to base currency. So baring any small hedging costs an investor that paid in GBP would get the same returns as someone that paid in USD or YEN etc.

As for JRM we don't really have any idea if hes invested into a hedged class or not. In fact most of his income wont come from investment gains but the slice of AUM his company takes in fees and performance fees.

The only way to grow those is to constantly out perform the benchmark. Which Brexit has little impact on it may actually make it harder to attract european or other overseas investors depending on what rules get implemented.

Infact with his dublin domiciled funds he could be in the odd position of not been able to invest in his own funds if the UK doesn't allow passporting for ucits funds. Which would also be the case for lots of large uk asset managers

Interesting, thanks.

 

[dowie]

For someone who’s argument rests on ‘we don’t know’, you’re coming across as though you think you do know and you think I’m wrong.

I've pointed out my argument quite clearly, you've already diverted into deliberately silly questions and general Brexit nonsense so perhaps just stick to the actual points being made.

As I said before, unless his property has actually fallen in value in GBP or he intends to convert those assets into overseas assets then it’s not a loss, unrealised or otherwise — but as you keep saying, we don’t know. However, you seem pretty sure that the rest of his portfolio is net-negative — what are you basing that assumption on?

No, the point is that we don't know where he's allocated the rest of his liquid assets/where his portfolio has been invested so highlighting that he's (likely) got some money invested in EM funds is a pretty weak argument! I can say he's probably not got his entire investment portfolio invested in EM funds but the main point is you don't know so you aren't really in a position to base an argument on it.

I pointed out too that plenty of EM fund mangers will hedge currency exposure. I also pointed out several posts back that the dividend he's earning from the fund management company itself was increasing year on year before Brexit and is down to an increase in AUM, you've just had another poster who worked in an EM fund confirm the same to you!

Essentially you've got no basis for the claim, it is completely unfounded. That it is not as extreme as the delusional poster who thinks JRM wants the UK economy to crash and burn doesn't make the more moderate flawed argument any less flawed.

 

[Irish_Tom]

Snip!
Essentially you've got no basis for the claim, it is completely unfounded. That it is not as extreme as the delusional poster who thinks JRM wants the UK economy to crash and burn doesn't make the more moderate flawed argument any less flawed.

I will concede that, based on @mattx2’s last post, my ire for JRM may well have been misplaced (re:Somerset Capital) although based on @toshj’s last post, not necessarily unfounded*.

*Yeah, yeah, I know — we don’t know…

 

[mattx2]

I will concede that, based on @mattx2’s last post, my ire for JRM may well have been misplaced (re:Somerset Capital) although based on @toshj’s last post, not necessarily unfounded*.

*Yeah, yeah, I know — we don’t know…

It's good to be critical of politicians but in think in this case your looking at links that are not there. Where you want to be looking if Brexit goes ahead is the trade deals and how the tariffs are set up. I'd pay close attention to companies that have donated money or employed senior politicians. That's where the real money will be made or lost

 

[dowie]

I do want to clarify that I'm not a JRM fan nor a particularly big Tory fan either*, the really conservative conservatives I can't stand tbh... JRM has abhorrent positions on social issues. To be fair to him he can be very witty/funny at times too but I don't think he's as smart as some people seem to think. I'm saying this not just with regards to any elaborate scheme to profit from Brexit but in general people seem to be blinded by the fact he's well educated and pretty hot on all things related to parliament.

He's still a religious idiot who believes in a magical sky fairy, he seemingly just blindly follows Roman Catholic dogma with regard to his social views. He's not much different in that respect to say a conservative muslim who is guided morally/ethically by what a book or religious leader tells them to think.

*If anything, domestically, I'm more in line with the Lib Dems, though I was happy with the more liberal conservatives like Cameron etc.. Boris I'm a bit split on, so far some of his decision re: increased funding for the NHS, police and prisons I'm happy with and sentencing review (as long as it is related to violent/sexual offences - I'm not a fan of prison in general) is something I'd support too.

Anyway, I realise this post is a bit unrelated to the value of the pound but I thought I should clarify that my posts in this thread re: JRM and the value of the pound aren't from being in line with his politics, he's amusing at times in Parliament and in interviews but plenty of his views suck.

 

[Irish_Tom]

I do want to clarify that I'm not a JRM fan nor a particularly big Tory fan either*, the really conservative conservatives I can't stand tbh... JRM has abhorrent positions on social issues. To be fair to him he can be very witty/funny at times too but I don't think he's as smart as some people seem to think. I'm saying this not just with regards to any elaborate scheme to profit from Brexit but in general people seem to be blinded by the fact he's well educated and pretty hot on all things related to parliament.

He's still a religious idiot who believes in a magical sky fairy, he seemingly just blindly follows Roman Catholic dogma with regard to his social views. He's not much different in that respect to say a conservative muslim who is guided morally/ethically by what a book or religious leader tells them to think.

*If anything, domestically, I'm more in line with the Lib Dems, though I was happy with the more liberal conservatives like Cameron etc.. Boris I'm a bit split on, so far some of his decision re: increased funding for the NHS, police and prisons I'm happy with and sentencing review (as long as it is related to violent/sexual offences - I'm not a fan of prison in general) is something I'd support too.

Anyway, I realise this post is a bit unrelated to the value of the pound but I thought I should clarify that my posts in this thread re: JRM and the value of the pound aren't from being in line with his politics, he's amusing at times in Parliament and in interviews but plenty of his views suck.

I think we agree on much in this post.

Apologies for misinterpreting your position as defence/support of JRM before.

 

[dowie]

No worries, apologies for coming across all pedantic (had a bit of free time while ill and arguing on the internet is an occasional hobby)