Global opportunities team: Meet the managers

Discover what Louise Kernohan, Georgina Cooper and Tom Wilson do at Newton and their route into investment management.

Portfolio manager Louise Kernohan joined Newton in 2020. She discusses her route into asset management, her career to date and the market outlook.

Louise is head of the global opportunities team and is portfolio manager for a selection of global and regional equity mandates, including the Global Equity, International Equity and UK Equity strategies.

What was your route into asset management?

I was born in Carnoustie in Scotland and studied a combined science degree (Mathematics, Physics and Philosophy) at Durham University. I had not considered a financial career in the City until I attended an investment bank open-day event in London in my second year. This led me to apply for an internship within Royal Bank of Scotland’s corporate banking division which I enjoyed, and which, via some internal networking, led me to focus on what I believed to be a more exciting area, investment management. I gained a Master’s degree in business management at Durham Business School and then applied for an investment management position at Deutsche Asset Management, which was soon acquired by Aberdeen Asset Management, which then became Aberdeen Standard Investments (ASI). I was part of the Pan European equities team for 12 years before becoming dedicated to UK equities in 2017. I left ASI to join Newton in 2020.

How would you describe your career at Newton?

My career at Newton has been eventful! I joined during the Covid lockdown and could not come to the office for the first 10 months in the job, which, with hindsight, made it more challenging to build relationships. However, I did not dwell on that and just got on with my new role the best I could. Shortly after I started, Newton’s integration with Mellon Investments was announced. Having had past experience of mergers, I was aware there would be challenges ahead, but also believed this business combination was much less complex both operationally and culturally, and knew that if you go into it with a positive mindset, change is an opportunity rather than a threat. I feel privileged to have been promoted to head the global opportunities team and manage Newton’s Global Equity and International Equity strategies.

How would you characterise your style as a portfolio manager?

We take a long-term, bottom-up approach to investing and believe it is important to consider both growth and valuation before investing in a business. In our portfolios, we aim to buy and hold high-quality companies that can grow over and above GDP, which display strong fundamentals, and that we judge as mispriced by the market. We also seek out long-term trends that may last for many years, rather than just a few months, such as technological innovation and digitalisation. We therefore prefer to identify those companies that not only have attractive business models, high barriers to entry and good earnings visibility, but that can also provide solutions that improve outcomes and efficiency for their customers. As such, we specifically look for high-quality companies with good growth prospects, and which we believe are undervalued on a long-term horizon. Although I previously focused on UK equities, the transition to global equity portfolios is helped by the fact that the UK market is globally diverse, with around 70% of earnings of listed UK companies derived from overseas.

What do you most enjoy about your job?

The people. I could tell from my interview process that I would enjoy working with the people here, and that has absolutely been the case. I also enjoy the fact that no two days are the same and you do not know what you will face on any given day. I love learning about different businesses and meeting different management teams. It is interesting to hear about their respective corporate strategies and the diverse ways in which businesses are run, and it is satisfying when you find investment opportunities where there is some element that you believe is being misunderstood by the market.

What have been the most memorable periods of your investment career?

I am fortunate to have had a lot of memorable periods and even though some of them may have felt challenging at the time, I look back fondly and see that valuable lessons were learned. The global financial crisis came within the first few years of my investment career and was particularly memorable. It was a very steep learning curve, with market volatility and corporate instability on a scale that was unthinkable beforehand. Since then, there have been various smaller scale ‘crises’ over the years, and it always serves to remind you to keep a calm head and stay disciplined to the fundamentals of your process. The Aberdeen/Standard Life merger was memorable too. I had worked in a stable team for over a decade, and the merger involved a complete change to my team and role. There were challenging times during the first year, with long stretches of uncertainty, but it led to a huge amount of both personal and professional growth for me, and had it not happened, I do not think I would be in the role I am in today.

What is the market outlook for global equities?

While the narrative of recent months has been about inflation ticking back up and interest rates staying higher for longer, we think that the focus of the market is starting to shift away from core inflation onto the speed and scale at which economies are slowing, owing to the impact of higher rates.

The market has been pricing in a soft economic landing, and there are reasons to believe that this is what will materialise (e.g. low inventories, strong balance sheets and strong employment), but there will inevitably be lurches in markets as weak data points materialise and bouts of risk aversion come into play. A hard landing cannot be ruled out, given the pace and extent of recent rate increases, and a higher-for-longer rate environment is more likely to tip an imbalance into a crisis; often, it can be the things investors do not foresee that cause the most damage.

However, we believe that structural-demand trends remain in place, as many global transitions continue apace, bolstered in some cases by government stimulus and support. A number of quality businesses have suffered from destocking, which we view as a temporary phenomenon that provides us with opportunities for long-term growth, and we remain focused on those companies which we believe have more resilient long-term earnings profiles and attractive end-market outlooks. We continue to seek to benefit from the opportunities and avoid the challenges identified by our multidimensional research process, as the tectonic shifts in areas such as technology, health care, energy and geopolitics continue to shape the world around us.

How do you spend your free time?

I run about five times a week. I simply love running, I always feel great after a run, and I find it so valuable to have time away from a screen. It is my best thinking time, although sometimes I find myself switching off and thinking about nothing at all which I believe is healthy when life is otherwise so busy. I find lessons from long-distance running are often directly applicable to long-term investing; for example, it teaches you about persistence when the going gets tough, and that consistency is key for executing a strategy. I have recently taken up indoor bouldering (a type of rock climbing) which is a fun combination of exercise and problem solving. I also play the violin and piano and have played in orchestras for most of my life, although I have not rejoined one since Covid. Maybe I will dust the violin off one of these days!

Portfolio manager Georgina Cooper joined Newton in 2022. She discusses her route into asset management and her career to date.

Georgina is a portfolio manager on the global opportunities team and manages a selection of global and regional equity mandates, including the Global Equity, International Equity and UK Equity strategies.

What was your route into asset management?

I grew up in Yorkshire and had no idea about the City or the financial sector at school. I did have a ‘maths brain’, however, and enjoyed playing a part in helping with my father’s small business. Despite studying for a BSc in Mathematics at the University of Edinburgh, I did not want to follow the traditional route of becoming either an accountant or a maths teacher so, while there, I applied for a 10-week internship at Morgan Stanley. I found the work interesting but extremely competitive, and through it, I met ‘buy side’ employees at Aberdeen Asset Management, before enrolling in their graduate programme in 2014. The programme had a four-monthly rotational structure, so I was able to cover various parts of the business such as private equity and fund of funds but was ultimately drawn to the public equities side. I subsequently joined the Pan-European equities team at Aberdeen in 2015 which then became a UK-focused team in 2017 following the merger with Standard Life.

How would you describe your career at Newton?

It has been a significant learning curve but an exciting one at that. From day one, it was apparent to me how great the people at Newton are and I feel incredibly lucky to be learning from many talented and motivated people every day. I love the collaborative, multidimensional approach we adopt at Newton, which has really broadened my horizons, and has given me the opportunity to take on a fresh challenge as a global and international equity portfolio manager.

How would you characterise your style as a portfolio manager?

I work closely with Louise and we both take a long-term, bottom-up approach to investing where both growth and valuation are considered before investing in a business. Our thematic research framework helps us to seek out longer-term trends that will last for many years, rather than just a few months, such as technological innovation and digitalisation. We believe this is a more effective way to identify resilient businesses with good earnings visibility, rather than trying to second guess the ever-evolving macro dynamics. The market often undervalues such companies and their ability to compound their growth over a long-term horizon. My transition to a global equities manager was helped by the internationally focused operations of many UK companies.

What do you most enjoy about your job?

I love the fact that every day is different, and you often don’t know what you will be facing day by day in terms of macro and stock-specific events, and their potential impact on your portfolios. As Louise says, it is great to meet so many different management teams and to learn about their different corporate strategies.

What have been the most memorable periods of your investment career?

I can characterise my career as having taken place against a backdrop of change, both in terms of market dynamics and in terms of the changes within the asset management industry. However, this has been overwhelmingly positive for me as it has afforded me the opportunity to evolve as a fund manager to focus on various areas, including UK, European and now global equities, as well as to be able to work alongside different people and constantly learn, evolve and develop my own style. In terms of market events, Brexit was a memorable time in the sense that despite it being a huge macro shock to markets, it brought home to me that if you believe in the fundamentals of your process and the stocks it leads you to, you can still manage a portfolio sufficiently well despite external events. That period in 2016 now seems a long time ago, given all the events that have followed since!

How do you spend your free time?

I like to relax and often find my ‘zen’ moments through cooking. I have very eclectic tastes in terms of what I cook, but while my favourite cuisines to eat are Asian ones, my current favourites to make are currently probably Italian and French. I would describe my style of cooking as ‘free-style’, and I am always keen to explore new tastes and flavours.

Portfolio manager Tom Wilson joined Newton in 2023. He discusses his route into asset management and his career to date.

Tom is a portfolio manager on the global opportunities team.

What was your route into asset management?

By the time of my A-levels, I had no idea what I wanted to do as a career. Having chosen an eclectic mix of biology, English and French, I decided to add in economics, a subject I had no prior experience in. I liked the idea and fresh challenge of studying something completely new. I was lucky enough to have an inspiring economics teacher, who taught with passion and flamboyance from the first lesson. She got me completely hooked on the subject and I ended up studying economics at Southampton University. Part way through my degree I secured an internship at what was then F&C Investments, working in the fixed income team. I spent a couple of days with the UK equity team, and I was instantly hooked by equity markets and meeting businesses. At the end of my degree, I was lucky enough to be offered a job on F&C’s stewardship team, which was at the forefront of responsible investing at the time. From there I went to work alongside a UK mid-cap portfolio manager, who again proved an inspiring individual and investor. I then joined Insight Investment and was part of an absolute-return team, working alongside some of the cleverest (and personable) individuals I have ever met. I am now at Newton, and very happy to be working alongside Louise and Georgina getting stuck into global equities.

How would you characterise your style as a portfolio manager?

I am a fundamental bottom-up stock picker, investing in companies that I believe have defendable long-term competitive positions, and strong management teams, combined with a healthy balance sheet and the ability to demonstrate consistent cash conversion. I believe that valuation is just as important as the business fundamentals when considering a potential investment and use free cash flow-based analysis and a return-on-capital matrix to judge whether an asset is attractively valued. I have a strong sell discipline, selling shares when the thesis is not playing out or something has changed within the company. I do not have a strong desire to be ‘proved right’ by the market and will act on any information that suggests that the capital of my clients may be at risk.

What do you most enjoy about your job?

Where to start? There are so many aspects to the job I enjoy, none more so than the privilege of getting to meet the people that run the biggest companies in the world and quizzing them on the day-to-day workings of their business, which often are interlinked with current affairs. If you were to really push me on one aspect of the job it would be how it can challenge you on so many levels – intellectually, behaviourally and emotionally! I love trying to navigate through all those facets of the job, and being part of a team that debates all the aforementioned elements. I love being surrounded by people who will push me on an intellectual level and hopefully make me a better person in the process.

What have been the most memorable periods of your investment career?

I think my whole career has been memorable in many ways. I joined right before the global financial crisis and have invested through a multitude of events, both good and bad, that have changed the world we live in forever. The most memorable thing is not defined by any one period, but by the people I have worked alongside during those periods. I mentioned previously that I was lucky enough to have a truly inspiring economics teacher and I have also worked alongside some incredible people who have inspired me both on an intellectual basis and on a personal level, many of whom have become lifelong friends.

How do you spend your free time?

I have three wonderful children and a wife who tend to take up most of my time outside of work, albeit sometimes it does not feel like free time! Outside of work, my biggest commitment is managing the Dover Rangers under-11s football team, for which my eldest son plays. We train on one or two evenings during the week and play matches on Saturday mornings. The children are an amazingly kind group who seem to be having a lot of fun. I love being outside, so as a family we are always doing something in the great English countryside. My daughter enjoys horse riding and I try to get out with her as much as possible, while my youngest has just started hockey. If after all that I have some time to sit down, you will find me trying to watch the last ten minutes of an Aston Villa match.