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Investment special: Win some, lose some

Those in the know, and those who just follow their instincts, reveal their best and worst investments

By Prospect   February 2011

Nicola Horlick, CEO Bramdean Asset Management

Ten years ago, I was the CEO of the UK investment business of a large European bank. I managed money for some of the largest pension funds in the country. If I decided to invest in a company, I would be putting in up to £100m. This led me to focus on Britain’s largest companies.

Today, I invest in a very different way. As I write, I am in Brazil negotiating to buy some farms on behalf of a number of clients. We are also raising money to develop movie projects, having been involved in financing film music scores for a number of years. I am constantly looking for niche areas for my clients to invest in, as I find the quoted equity markets unappealing. It is more rewarding financially for clients and more intellectually rewarding for me.?

Paul Feeney, executive director and head of distribution, BNY Mellon Asset Management International

Ten years ago, a good education for the kids was our top investment priority, followed by a family home, a little place in the “rock solid” market of Florida, some private equity and a few pieces of Irish art. Things have changed. I still invest in the markets, but in assets offering a stable real return. We also bought a very old house in London with “potential,” but let the holiday home in Florida go—or rather, watched it as it went. My art collection has become increasingly sub-investment grade and eccentric, a bit like me. I think we will all go rather well in our crumbly old house. Interior designers beware.

Lucia van der Post, founding editor of FT’s How To Spend It and Times columnist

Equities have done me well—I once turned £10,000 into £220,000 in about three years (Turbo Genset—I bought at 10p sold at 220p and it now languishes again at 10p). On the other side, I guess I’ve lost £30,000 on ones that bombed. Currently I’m waiting anxiously to see if a gorgeous flat in St Pancras Chambers turns into a nice little nest-egg or a loser. I’ve got a couple of Hockneys I bought years ago that seem to have done well.

John McFall, Lord McFall of Alcluith, formerly the MP for West Dunbartonshire and chair of the Commons Treasury Committee

My best investment came when, aged 21, I decided to try and get in to university. I enrolled at night school and handed over £10 in tuition fees (can you imagine?). After great encouragement from my teachers, I secured sufficient qualifications to study for a science degree.

My worst investment was a Polski Fiat, which I bought in the late 1970s for about £2,000. After three months, at its first service, the engine seized up. It became a hide-and-seek venue for my children and their friends as it sat in the drive.

Ruth Lea, economic adviser, Arbuthnot Banking Group

Ten years ago I made the mistake of taking an IFA’s advice and investing in dotcom shares. I lost a fair sum. Any appetite I had for investing in exciting, risky products evaporated. My investments are now strictly low risk and dull.

I believe that, apart from financial nest-eggs for my twilight years, the best policy is to buy assets that can be regarded as “consumption,” in economists’ jargon. If they don’t deliver, it doesn’t matter. If they do, that’s a bonus. With my stamp collection, which contains many 19th-century classics, the enjoyment is in owning these “witnesses of history,” irrespective of the returns to be made on these fascinating bits of paper.

Julie Burchill, writer and columnist

About five years ago I sold my house to a developer for £1.5m. Despite being encouraged to invest it, I gave half of it away and spent the rest on having fun. It’s been the perfect balance between hedonism and righteousness and I intend to carry on this way. Andrew Carnegie said: “He who dies rich dies shamed” and that sums up my attitude to money—easy come, easy go.

Trevor Phillips, chair of the Equality and Human Rights Commission

I invested in a Burberry trench coat 22 years ago, like my dad’s from the 1950s. It’s been all over the world and still scrubs up well. Someone tried to steal it on a train in the US. He put it on while checking his BlackBerry though he knew it wasn’t his.

My worst investment was a three-year contract for my clapped-out Nokia. Everyone else has a shiny iPhone.

My best investment was an eye-wateringly expensive education for my daughters, who will be out-earning me in law and new media before they hit 30. Hopefully they will use their luncheon vouchers to make sure I don’t starve in old age.

Mark Hannam, writer, chair of Fair Finance

I spent around a dozen years working in institutional investment management. My worst investment was to buy South Korean bank debt for a client shortly before the Asian financial crisis in 1997. They got their money back (eventually).

As for my own investments, the pleasure of owning an asset is often more important than its value. My best investments are works of art. This year, for example, I bought a beautiful bronze sculpture by Peter Peri.

Around ten years ago my wife and I bought and then renovated a Georgian town house in Hackney. This has turned out to be a great investment, both in terms of pleasure and value. If I didn’t already own a nice house in Hackney that is what I would buy now.

Jon Moulton, chairman of Better Capital

Today at least one bubble is close to bursting; the debt of most western nations and their currencies. I’m staying clear of the fixed-rate, long-term debt of the western world—interest rates will rise again painfully.

As for best and worst investments, my wife sadly declined, with unusual vigour, to be nominated in either category. So, my best investment was in Ashmore Group, the emerging markets fund manager, in which I made a fortune.

The worst investment was in Newbridge Networks, where we made five times our money. If we had held on for a few months it would have been 72 times.

Nicholas Carn, former partner of Odey Asset Management, advises hedge funds, foundations and sovereign wealth funds

I own some bank debt—high yield and high risk—as well as real estate in Berlin: a hedge against the euro project being “resolved” by high German inflation.

I also have a print of Tom Cribb, the famous 19th-century bare-knuckle fighter, which is quite valuable. Probably my best proper investment, though, was at a very early stage in Geothermal International, the leader in ground source heating systems.

The title of worst investment is hotly contested, but it has to be my share of a film made by the brother-in-law of an ex-colleague. The “money” is the lowest form of life in any artistic endeavour. I never saw the film and because it was structured as a US LLP I wasn’t even able to use the tax loss. The brother-in-law went on to be a successful director of slasher movies.

James Lovelock, scientist and environmentalist

My best investment was in 1979: a 9836C desktop Hewlett Packard computer, which reliably served my needs for more than ten years and was a joy to use. It cost £20,000 but was a priceless asset.

My worst investment was a new house built in 1964 in the village of Bowerchalke in Wiltshire. As in Galsworthy’s Forsyte Saga, the architect said that it would cost about £4,000, but the final bill exceeded £13,000. The damp-proof course was omitted and we lived waterlogged for a year. I have learned a lot since then.

Angela Knight, chief executive of the British Bankers’ Association

My best investment remains housing—I hope! Ten years ago I bought my eighth house and when I sold it in 2006 I doubled my money.

My worst investments are many. I bought shares in a PLC where I was a non-executive director a few years ago. They shot up—but then we hit the dotcom bust. I paid £7.20 a share and their current price is around £1.30. I still hold them in hope.

Ian Maxwell Scott, executive director, Rensburg Sheppards Investment

While regarding myself as a hardnosed investment professional, my pulse still races at the sight of a classic car, a carriage clock or a piece of Royal Doulton china—all of which I have acquired with rather mixed results. The last of these did very little, while the clocks ticked up 100 per cent. My best speculation—an Aston Martin DB5 Drophead—rose eightfold. I should mention, in passing, that my investment in wine has proved disastrous. I drank the lot.

Rosie Millard, chief writer of property section, Saturday Telegraph

I only understand investing in bricks and mortar. Ten years ago I put down a £10,000 deposit for a one-bedroom flat costing £100,000 in the rather seedy Parisian district of Pigalle. Putting my money in Paris before prices shot up was the best financial decision I have ever made. The flat is now worth around £450,000. The area has got less seedy; Starbucks coffee, not leather and whips, is flogged on the corner.

Where I would plunge money now, however, is in big, rambling derelict properties around urban city academies in England. I forecast a rush of middle-class uptake to state secondaries.

PJ O’Rourke, writer, political satirist

Ten years ago I invested in a baby daughter, Olivia. The returns have been excellent. These days I’d suggest investing in a Smith & Wesson .38 handgun—the Visa card of the future.

Affection is the best investment I’ve made. For example, I invested great affection in a certain cigar store in Toronto. The payout arrived in a plain brown paper package on my wedding day in 1995. I honeymooned with a pre-Castro Havana Montecristo No 2.

My worst investment has been in other cigars, as my wife—and the smell in the upholstery, carpets and drapes at our house—will tell you.

Tim Harford, FT columnist

By far my most successful investment decision was to spend no time deciding on investments and instead write a book.


Also in Prospect’s investment special:

Alistair Darling: what is financial literacy?

Jim O’Neill: A great American revival

John Kay shows Max Hastings how to invest

Charles Batchelor: Where to put your money

Jim Rogers: The Chinese century

Vicky Pryce: Stop the Greek exit

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