Robin Geffen took advantage of the last bear market to set up a boutique investment business.
According to data compiled by CityWire, Robin Geffen has outperformed his peers in each of the last five 12-month periods. So what's different about him and his business?
Background and early career
Robin Geffen was born in London in 1957, and graduated with a degree in Politics, Philosophy and Economics from Keble College, Oxford in 1979. On leaving university he entered the financial services industry, joining Charterhouse J Rothschild as a graduate trainee.
Subsequent moves saw his career progress through Eagle Star, York Trust, Scottish Equitable, and Orbitex Investments Limited, where he served as Chief Investment Officer from 1997.
Neptune Investment Management
During the bear market in 2002, when others were setting up hedge funds, Geffen decided to establish Neptune Investment Management, a long-only fund management business.
Neptune is a relatively small 'boutique' operation, with assets under management of about £3.2bn, and fewer than 30 employees, all of whom are part-owners of the business.
In addition to being the Managing Director, Geffen also manages some of the company's 19 funds directly, including its 'Global Alpha Fund' and 'Neptune Russia & Greater Russia'.
Unlike London's other financial businesses, which tend to base themselves in the City or in Mayfair, Neptune is located on Hammersmith, "away from the rest of the herd". This could be seen as symbolic of the company's desire to separate itself from the constraints and accepted thinking of the industry.
Investment style
One of the constraints to be cast off was the focus on index weightings. Geffen's approach is to buy attractive companies regardless of the extent to which they skew his funds away from the underlying index. At the height of the crisis last October, his Russian fund, for example, had a weighting of 22% in energy, compared to a 60% weighting for energy in the Russian Index.
As has been discussed before on Motley Fool, what's the point of paying managers to actively manage funds if they're really just pseudo-trackers.
Geffen takes a sectoral or thematic approach to the problem, first identifying industries that he expects to outperform, and then identifying the winners within that industry, wherever they are in the world. And as his remit is global, the focus tends to be towards larger companies.
Teamwork is important to the process -- the team are all based at one location and pool their knowledge.
Results so far have generally been impressive, and outperformed the pack. Even though his Russian fund, with which he is most publicly associated, lost 59% in 2008, it still regularly performs better than the rest of the market.
Current positions
The Russia fund is still weighted towards the consumer sector, where spending by the emerging middle class is seen as less volatile than the energy business. In a recent interview with Hargreaves Lansdown, Geffen said he expects to see the market gains in Russia in the final quarter of the year.
With his finger on the pulse of markets around the globe, he believes China will come out of recession before the US. Neptune's China fund is weighted towards infrastructure and discretionary consumer spending.
His comments are not confined to the stock market: In June, he said believed the house-price increases were a seasonal blip; he expects to see a further 10-20% decline due to transaction volumes being low, consumers focusing on paying down debt, banks being are less enthusiastic, and the shrewd long-term operators not buying in at these levels.
It will be interesting to see whether his approach will continue to outperform the market in the years ahead.
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