A day in the life of Andy Headley, Veritas Management LLP.Wednesday, 13 November 2019
We speak to Andy Headley of Veritas Management who manages a global portfolio on Witan’s behalf.
My alarm goes off…
At 6am. I run or cycle to the train station; take a train to London; cycle to the gym (for a 20-minute workout), then cycle to work where I take a shower. I’m at my desk at around 8am.
I’m responsible for….
The global team. There are 10 of us in total, 8 analysts and 2 analysts/portfolio managers. I am the lead portfolio manager for the Global Focus Strategy and look after approximately 15% of Witan’s assets.
I got into investment management….
After university, when I originally qualified as a chartered accountant but then decided I enjoyed learning about companies and investing so joined Newton Investment Management as a utilities analyst. Over the next 5 years I analysed utilities, transport, support services, consumer discretionary and consumer staples before becoming the portfolio manager for Newton’s Pan-European funds. I co-founded Veritas in 2003 and we currently manage assets of £18.7bn.
My typical day….
I will do around 6 hours reading and have 2-3 hours of meetings in a day.
Reading is wide and varied and includes company reports, investment reports written by internal and external analysts, thought pieces, research documents and books. The main aim of reading is to gain insight into a particular investment either through learning specifically about that company or its industry or by understanding threats or potential changes to the industry. Reading thought pieces are often useful in a wider sense and can help generate new investment ideas.
My meetings are primarily investment related. They are a mix of external and internal meetings. External meetings are usually with company management teams of companies we are invested in or are interested in (either as a potential investment or related to an investment). I also have client meetings, with clients such as Witan to update them on their portfolio and performance. Internally we meet to discuss the progress of research with analysts and to help understand the thesis behind potential investments. Such meetings often include calls with company management teams, their competitors and industry experts to understand the competitive positioning of a company better.
My best/worst investment has been….
One of my best investments has been Charter Communications, a US telecommunications and media company providing cable television services. We bought this position originally as Time Warner Cable which then became Charter through acquisition. The thesis was always that cable in the US was structurally advantaged infrastructure for the provision of high-speed broadband as the existing cable infrastructure is a sunk cost and the upgrade path to very fast broadband speeds was at a very minimal cost. The only infrastructure that can compete (in terms of speed and capacity) is fibre but this requires the infrastructure to be installed (largely from scratch) and so is extremely expensive. Consequently, our thesis was that cable would largely become a local monopoly in the provision of high-speed residential broadband at high margins. This is now largely being evidenced although we continue to benefit from their competitively advantaged position.
My worst investment has been Capita, the UK outsourcing company. After an exceptionally profitable period under the leadership of Paul Pindar who stepped down in 2014, the new CEO managed the business extremely poorly with geographic expansion and poor capital allocation (overpriced acquisitions) at a time when many customers were retrenching from UK outsourcing due to fears of Brexit. This led to declining profitability together with a stretched balance sheet. As a people business the poor management also led to the loss of some of the higher quality management team. Eventually the new Chairman removed the CEO and appointed a new CEO in 2017 who then launched a rights issue to support the balance sheet. This led to further share price weakness. We believe that Capita has some valuable assets and the current CEO is largely making the right decisions that will allow this value to be crystallised for shareholders.
I keep motivated by….
Learning about new companies and industries, finding new investments and then watching as a thesis takes hold. I love investing. I am extremely competitive so also enjoy the competitive aspects of investing!
I enjoy seeing the team develop – we have a fabulous team of analysts and I enjoy coaching them and seeing them develop into exceptional analysts. The results we have enjoyed as a team are largely due to the quality of the analyst team.
I take the train home and have a beautiful walk back to the village I live in which allows me time to wind down and reflect. I then enjoy spending time with my wife and two daughters. If possible, I play tennis in the evening during the summer and during the winter tend to work hard on reducing the (ever growing) stack of books I have to read! At the weekends I enjoy cycling and running.
If I wasn’t doing this job, I’d be….
I’m really not sure! I can’t really imagine doing anything other than the job I do – as my wife will tell you I am certainly not practical! I’d love to have been a professional tennis player or professional cyclist but I was never skillful or fit enough for either!!