Aoifinn Devitt: This podcast was made possible by the kind support of Alvine Capital Management, a London-based specialist investment advisor and placement boutique. Let’s hear how leaving time for life, such as a passion for bridge and small craft sailing, always seeing a glass as half full, and nurturing relationships weaves together to build an extraordinary career. I’m Aoifinn Devitt, and welcome to the 50 Faces podcast, a podcast committed to revealing the richness and diversity of the world of investment by focusing on its people and their stories. I’m joined today by William Bourne, who is a longtime fellow advisor to the local government pension schemes in the UK and has over 30 years’ experience on all sides of the asset allocation business. He is the founder of Linchpin, which provides advice on investments and governance to institutional investors, and has worked in sales as well as investment roles, including a considerable amount of time spent in Japan. He’s a frequent commentator and participant on the investment advice conference circuit, and a co-host of an occasional webinar series with me in which we bring together a lively group of investors and their advisors. In addition to his substantial investment career, William also has a fascinating what he calls Hinterland, which we’re going to dive into in some detail here. Welcome, William. Thank you for joining me today.
William Bourne: Thank you, Aoifinn. Fascinating may be a bit too strong, but I’m very happy to share what I can.
Aoifinn Devitt: We look forward to it. Well, let’s start with your career, which has been long and varied, and as I mentioned before, both global and hyperlocal, if you think about the work you do in East Sussex. Can you talk us through your journey into the investment world, and did it take any surprising turns along the way?
William Bourne: Yes, I’m slightly horrified to realize I’ve now been working for nearly 40 years. I started working as a blue button on the London Stock Exchange floor. And I can well remember being in the very small boxes which the stockbroking firms used to use off the main floor. And of course, in those days, there was an account system whereby you could buy and sell within 2 weeks and not pay for it. So we all were encouraged to try and make money that way. And I just remember the very first week, not quite the first day, the senior partner in charge of the box said, “William, have a go.” So I did. And surprise, surprise, 2 hours later, the stock had gone up by 10%. That’s how they got me hooked. I didn’t actually enjoy stockbroking very much. So I moved to the asset management side after about 5 years. But I do recall while broking that I was slightly bored and they knew I was slightly unhappy. So I got called in one day and I got asked this question. They said, “William, ‘do you think you could be in Japan and go live there in 10 days’ time?’ Because somebody had decided not to go at the last minute. And I thought for about 5 seconds and said yes. And that has been the start to so many things in my career, including my wife.
Aoifinn Devitt: That’s wonderful, quite amazing, the ability to think on the spot and seize the moment to pursue an adventure. So tell us about your time in Japan and, and what you did there.
William Bourne: Well, again, I was still stockbroking at that stage, the first time I was in Japan, and in those days it was still considered a dangerous posting, so I got extra money for being being there. And it was in some ways very different because of course there was no internet, no mobile phones. The main communication was either by telex or faxes had just started, but I didn’t speak to my family for 15 months. I really saw there were very few foreigners in Tokyo, so when you saw somebody in the street, you just stopped and had a quick chat with them. But it was great fun and the kind of experience which is very hard to have nowadays.
Aoifinn Devitt: This would have been what, in the late ’80s, early ’90s?
William Bourne: This was ’84 to ’89.
Aoifinn Devitt: So there must have been some pretty interesting economic backdrops occurring around that time.
William Bourne: Well, it was right in the middle of the kind of Japanese bull market, and there are distinct similarities with what’s happening in the world today and how markets are going up in Japan in those days. But what I do recall was that as a foreigner in those days, you were very much at the bottom of the pile. If a taxi driver was trying to pick people up late at night, you would be the last person he’d pick up. And when I went back to Japan 15 years later, it was completely the opposite. He wanted you because he knew you would pay well.
Aoifinn Devitt: And I’d be interested to know how your time in Japan, as well as after that, influenced your investment beliefs and maybe your attitude to markets and maybe some skepticism that you bring to bear.
William Bourne: Aoifinn, not hugely. I mean, what it did teach me was how different other parts of the world are to Europe. And in particular, it’s always given me a predilection for investing in Asia, understanding what Asia is doing. I mean, if you talk about investment beliefs, the most important kind of belief which I have, and I’m not very fashionable in this nowadays, is that I’m very much of the monetary school of thought. And what I mean by that is, I believe that investment markets are, to a large extent, moved by the amount of money and credit going in the world. And if you think about it, the last 10 years, central banks have been pushing money and credit into the world. Over— the first thing money goes to or credit goes to is to pay for things, pay for bills, or possibly to invest for future returns. But if there is an excess, it goes into financial markets. And that’s what’s been happening over the last 10 years. And I actually use a data framework which is provided by a research house. And It has been absolutely invaluable, particularly at turning points. And would— I I’m just going to mention two turning points, but there have been many others. One is March 2009, after the global financial crisis. The second is March last year, after the kind of COVID crisis broke. Both times, there was a huge surge of money coming in from central banks. And you virtually knew that a lot of that, the excess of that was going to go into financial markets. But there are many other turning points I could talk to.
Aoifinn Devitt: My history with you is sitting in meetings. I know that you’re not afraid to go against the grain. So that may, maybe your view on financial markets back in March, which was quite a bullish one, maybe that was a bit contrarian at the time. Would you say you are a contrarian for the most part, or how do you characterize your investment beliefs?
William Bourne: Well, I’m certainly, I don’t believe in going with the consensus. It’s not always right to be contrarian and go precisely in the opposite direction. But I do know that probably the number 2, if not the number 1 lesson in investment is if I’m buying something, I need it to feel a little bit uncomfortable, because if it doesn’t feel uncomfortable, I’m probably too close to the consensus.
Aoifinn Devitt: I’d like to just segue from that into the work you do on investment committees and in some of your chair roles. What do you try to bring to the table to those discussions?
William Bourne: I like to think that the outcome from my input will be better decision-making. And I don’t mean by that that I’m always right, because I’m often not right. But I do mean that I will ask the kind of the questions which maybe haven’t been asked by other people. And particularly that I will bring some diversity of thinking to the table. And I think that’s important and the real reason for diversity. Because if you get people who come to the table with different views and who maybe draw different conclusions from a set of facts, you’ll have a much better debate. And that is what leads to better decision-making. I could also talk about experience, etc., but there are many other people who also bring experience to the table, so I’d rather focus on providing some diversity of thought.
Aoifinn Devitt: And how about your role as chair in some of these roles?
William Bourne: When I started acting as the chair of the Pension Board, it was the first time I’d ever chaired a meeting, and I, to be honest, I was a bit nervous. This was 6, 7 years ago. But I’ve realised that to be a good chair, you need to say as little as possible. You need to find ways of making sure that the other people in the room get their chance to say, and your role really is almost to act as a conductor to orchestrate that. Occasionally, you’re going to have to come in and actually say, “Okay, we’ve talked too much about this,” or “You need to think about that,” but it should really all come from the Board members rather than the Chair. And actually, I was on a meeting today with one of the councils I work with. It was a training meeting, kind of, rather than an actual decision-making meeting. But I was delighted to see that I think 5 members of my board were there out of a total of 16. Who was asking the questions? It was very largely the members of my board.
Aoifinn Devitt: Very interesting that I think for chair, as well as getting meetings to run on time, I think seems to be a critical measure.
William Bourne: That’s my other reputation. I don’t always succeed, but I do try to keep to time.
Aoifinn Devitt: You spoke about cognitive diversity, and diversity is certainly a topic that’s very topical, certainly right now, and when we discuss the world of finance, the investment world. What are your thoughts on the diversity that is currently in place in the investment world? And maybe you can reflect on your almost 40-year career in that respect. Have you seen a lot of change?
William Bourne: There’s clearly been a huge amount of change. As I said earlier, I’m a great believer in diversity because I think that’s where you come to good decision-making. I’m not sure that the investment world should offer opportunities for everybody because I don’t think everybody is suitable for it. But I do think very strongly that anybody who does have that aptitude should be given opportunities to enter it and do well in it. What’s changed? I mean, clearly, go back to the 1980s, it was very much about relationships. State the obvious, it was much more male-dominated. It was more about getting to know somebody by having lunch or possibly having a drink with somebody, and far less about your technical expertise. I would suggest that today, the pendulum has swung almost too far the other way. I know my eldest son joined a graduate trainee programme in the City. And by the way, I tell all my children not to go to the City, but he just, he decided simply to disagree with me. But he was the only graduate trainee out of 50 who had an arts background. And I think that is now actually providing the diversity as much as coming from a different colour, different gender, whatever. You actually need diversity of all sorts.
Aoifinn Devitt: And when you mentioned not everybody is suited to the investment world, do you mean by temperament, maybe because of the pressure that it involves, the type of incentives that it involves?
William Bourne: I would argue that the investment world has become far too important. If you go back to when I started, investment management firms, asset management firms were very largely the backwaters within stockbroking firms. You had Phillips and Drew Asset Management. I actually worked for a company called Greaves and Grant, and they had a firm, a set of funds called Barrington Funds. And it went from there to being kind of almost the most important thing in the financial world. And it’s now gone back a little way from that. I think that the financial world should be a subsidiary to the real world and serve its purposes rather than dominating it. And I think that’s part of the problem, that everybody thinks that the money is to be made in the financial world, and therefore many people go into it who probably shouldn’t do.
Aoifinn Devitt: And I’m interested in knowing then how you tie that to what is seen as an increasing influence of investors in corporate governance and corporate actions, essentially through engagement, and the way that institutional investors are seeking to flex their muscle in matters such as ESG concerns. Do you think that that’s appropriate?
William Bourne: Yes, I do. Straight answer. And the reason I say that is because I think capitalism is very slowly morphing from a model where the financial outcome was the only thing really considered to a broader model where other stakeholders’ interests are considered. And obviously one of them is the future of the planet, climate change and things like that. So yes, I do think it is important that institutional investors are able to engage and influence the companies they invest in. I have considerable problems where maybe single-issue activist groups try and kind of hijack the agenda. I think that’s very unhealthy.
Aoifinn Devitt: And tied to that, though, one I know of your pet subjects perhaps would be whether having that kind of an agenda seeking to influence is compatible with passive investing. Can you just tell us your thoughts on that particular juxtaposition?
William Bourne: Let me start by saying I’m not saying that passive investment has no place. I think it has a very valuable place in providing cheap investment. I do think there is a conflict between passive being cheap and the sustainability agenda, and I come from a number of areas there. The obvious one is the point that if you are invested passively, you’ve got no say on whether you actually own, say, a fossil fuel company, you are locked into it for better or for worse. And the passive industry will defend that by saying, well, we engage them and try to make them into better firms. I’m Yeah, sure they do do some, but the problem they have is that engagement takes a great deal of resources and time. And I don’t think it’s possible for a passive fund with maybe 1,000, 2,000, 3,000 firms in it, to engage with all those companies or even a minority of them in any great depth. So what I’m really saying is if they were going to do it properly, they would have to spend a great deal more money on the engagement and therefore they wouldn’t be so cheap. And that’s where I think the inconsistency is.
Aoifinn Devitt: Very interesting. I think we’ll have to park that one for another podcast at another time because clearly there’s a lot we could dive into in terms of whether it be low carbon indices, whether that in fact is a form of greenwashing, etc. If there’s anything else you’d like to say on that, please feel free now.
William Bourne: The modern approach to kind of trying to make passive investment more sustainable is to use low— to try and introduce low-carbon indices whereby through various methods, you’re trying to reduce the carbon emissions from a portfolio. And they almost all depend on some form of scoring. And my problem there is that the data scoring is a very young industry. There’s all sorts of criticisms you can make about it. And that’s The doctor said it has no value. I’m reluctant to place, to invest a significant part of a portfolio on the basis of data which is not really robust.
Aoifinn Devitt: It’s true, and I suppose we also then have the issue that perhaps perfect is the enemy of the good, that we’re not at a level of perfection yet, but perhaps some movement along that direction is better than nothing. Thank you for raising that issue, and I think it’s an issue we will continue to debate. Just going back to some of your experience in startup firms in the financial world, because I think this gets to access, the idea of access as well. What has your experience been in some startups, and have you learned any lessons from that?
William Bourne: I’ve been involved in two startups, no, three startups of my own, and two of them were with other people. And the first absolutely clear lesson I would give to anybody, by the way, both of them really failed, would be be very careful who you decide to start up with and do your due diligence. In one particular case, I had just failed to read the previous board meeting minutes. I’d been provided with them, and I hadn’t read them carefully. And if I had read them, I wouldn’t have joined that particular startup. The third one was Linchpin, which I set up on my own. And setting up on your own is a lonely business. And again, I would say to people who are thinking of starting up, if you possibly can, do it with somebody else. But as per the first thought, Just make sure you do your due diligence on who you’re doing it with.
Aoifinn Devitt: Excellent advice there. Let’s now dive from your current occupation into your hinterland, which we talked about before. One of the surprising things I learned about you during a train ride, I believe from Preston about a year ago, was around your passion for bridge, and not just for playing bridge, but also for teaching young people bridge and organizing camps. I’d love to hear a little bit about that and why you think it is a good skill for young people to learn.
William Bourne: Yes, those train rides from Preston, yes, we both know them well. Bridge, you go back to the 1930s, Bridge was a popular game. It was so popular that the big competitions were watched on, kind of, watched by many, many hundreds of people. And it’s now seen as being a game for old people, and that’s not wrong because it is both good socially and also for mental activity for the over-60s, and I am over 60, so I can say that. In fact, I’ve actually suggested to some people that maybe they should have rebranded bridge during the COVID crisis as kind of social therapy, because it is a wonderful way for older people to keep alert and keep in with their friends. But turning to young people, the one big misconception about bridge is that it’s not exciting. It is unbelievably exciting. I remember taking my youngest son, who by the way is the only one of my children who really plays bridge, aged about 10, 11, to a kind of weekend competition. And I had him at about 10:30, 11 in the evening, playing a game of what’s called speedball bridge, which is playing bridge at about 3 times the normal speed. And he, you know, I left him in a quite impossible contract, which had been doubled and all the bad things that happen at bridge, and he made it. And he’s never looked backwards since. He just so enjoyed that moment. But what does it bring to young people? First of all, it’s always better for young people to play with other young people. They make much more noise, it’s much more fun. It brings a whole range of skills. In particular, mathematics is all about counting. You only have to count to 13, so it’s not difficult mathematics, but you have to do it quite quickly, so you get that kind of practical mathematics. Strategy— you are playing a hand, you’re declaring a contract in bridge, You are in charge. It’s like being the captain of a ship. You can get it right and you can get it wrong. Partnership. You’re always playing with a partner. That again is a really helpful skill. Winning and losing. Sometimes you can make a good play and it can go horribly wrong. Sometimes you can make a bad play and it can go right. And learning to win or lose with grace and with your partner is a real social skill. And I have run over the last 3 years, 4 years, I’ve run 2, and it would have been a 3rd one last year, events for young people whereby we get together between 50 and 100 young people for a weekend of solid bridge, and you’d be amazed how much bridge they play in just 2 days. My bridge club is actually next week playing against a young Zambian side. They were approached and they thought they should offer it, but it is very important for young people to play with other young people, not with the oldies.
Aoifinn Devitt: How interesting. And how long does it take to become proficient in bridge? Is it relatively easy to learn?
William Bourne: It’s like a lot of other sports that you can get to a level, but there’s always another level and another level. What is good about bridge is that once you’ve reached a fairly moderate level, you can play against almost anybody else right up to the international champions, and in that respect it’s a little bit like golf. It is a little tougher to get from zero, you know, point zero, to getting to a moderate level, It does take time, and I think, to be honest, the way that it’s taught sometimes in this country could be improved.
Aoifinn Devitt: It’s, I think, interesting with the new interest in chess thanks to Queen’s Gambit on Netflix. Maybe there’ll be a resurgence in interest in bridge. You might want to try to use that as a marketing strategy.
William Bourne: I’ve used chess as a kind of, you know, as an example of what the bridge powers that be should be doing. You’re quite right.
Aoifinn Devitt: No, it’s interesting because I think also decision-making, risk-taking, and also, as you said, grace in losing and in winning, these are all really interpersonal skills, as well as important skills for life that I think when they can be learned in a setting— and can it be done effectively in our current remote existence?
William Bourne: Yes, there’s a lot of online We’ve bridge. All— because we can’t meet people, we’ve all had to go to online bridge, and the traditional platforms have tended just to be a computer program, which work perfectly well. You can chat, you can play, but increasingly the latest platforms have now got a video feed as well. So as well as actually playing bridge, you can see your partner and you can see your opponents. That again is really helpful for both the elderly and also for the young.
Aoifinn Devitt: And you spoke about a young person learning to be captain of their ship, and that’s a segue to another aspect of your hinterland, which has been sailing. Can you talk about some of your small craft sailing that you’ve done and some of the adventures it’s taken you on?
William Bourne: Well, go back to the 1970s, and in some ways the 1970s are a little bit like you here when, know, like now, because we can’t go to Europe. In those days, we couldn’t afford to go to Europe. And the easiest way to get a holiday was actually to get onto a little boat. And I spent a lot of my youth sailing around the coasts of England and in fact Ireland as well. And I say a little boat, I mean a very little boat. It was bigger than a dinghy, but not a great deal bigger than a dinghy. Anybody who does sail, if they know what a folk boat is, it was a slightly larger plastic version of a folk boat. Even today, and I have a boat, I have a small boat today as well. Over the years, the strongest memories I have in my life are almost all from sailing. They’re not all good. Sometimes they’re bad. I was in the, for example, the famous Fastnet 79 Gale when, you know, sadly a lot of people lost their lives because a storm is middle of August, but a really bad one. Depression caught up with another depression and caused a very sudden storm.. I was in the class which was right in the middle of it. I got washed overboard, but luckily I got washed back again. But that’s a bad memory from sailing. I’ve also had the most wonderful memories. I was lent a boat by some friends aged only about 25, 26, and I took a summer off to go sailing around Iceland in it. And I’m so grateful to them for having lent me the boat because I could never have afforded it. But again, I have never regretted sailing around Iceland with a whole host of friends. They all— friends came for 2 weeks, 3 weeks, 4 weeks. And again, seeing things we had never have done, never done otherwise. So one of my kind of lessons for young people today would be don’t be afraid to go and do something like that. Don’t feel you have to stay stuck at work.
Aoifinn Devitt: Must have been fascinating. Let’s say it never got dark in Iceland in the summer. But also, what is it with sailing? When you have an experience like that, like you mentioned in the Fastnet Race. Do you have to, metaphorically speaking, get back on the horse? Do you have to get back out there? Did it have any kind of impact on you, or did it just kind of seem like part of the experience?
William Bourne: I think I was so young, it didn’t really have much impact on me. I’m much more aware of what could happen bad today than I was then. So I’ve also had other things. I’ve actually been shipwrecked too. I was simply a crew member. I wasn’t the captain, but I was in the Bahamas. We’d been sailing. This was— I’d flown out as a crew, and we’d actually been in Haiti, which is a strange place to go in a yacht, but we’d had an interesting 3 or 4 days. We’re sailing across the Bahamas, and in the middle of quite a lot of wind, but not, you know, not a gale or anything like that, middle of the night, the boat suddenly hit a rock, or hit a reef, and we did not know where we were, because in those days there was no GPS. And I was interested to read in the paper the other day that 3 people had been rescued from a reef, having been stranded there for 33 days. And I wondered whether it was the same one, but I checked it out and it wasn’t. And in fact, it wasn’t a reef, it was actually the end of an island. So I then had, with one of the other crew members, I had to walk for— I think it was probably only about 12 miles, but I can promise you, if you’re walking for 12 miles in soft sand, it feels like a great deal longer to try and get help. And we got help, we were rescued. But that again was a kind of, you know, kind of, I will remember that experience till the day I die.
Aoifinn Devitt: It certainly makes me happy to be alive. Well, let’s just get back to some of the other influences in your life besides these fascinating other activities. Were there any people that had a particular influence on you and how?
William Bourne: Yes, it’s interesting. I mean, I’ve tended to plow my own furrow. There are people who’ve had an influence. I will go through 2 or 3 of them. There’s nobody who’s been a kind of mentor throughout my life. And the first person I would mention would be my godfather, who’s called John Colfox. And he was a kind of fairly typical English squire in West Dorset. But he had the most wonderful qualities. And what I learned from him was always to be a glass-half-full person. You know, he had some bad things happen to him in his life, but he always remained cheerful. And he also always, although he came from the establishment, he was always happy to have the time for anybody. And that’s something else I’ve tried to learn from him. I think the second couple I would mention, and these are not people I would— and John was, I was really close to John, he was kind of my other parent. The second couple I will mention was very different. They were the people who lent me this boat because they lent me, they gave me such an opportunity. And what I’ve learned from them is not to be too possessive about possessions. I lent my boat to a young 23-year-old last year because he was stuck, he had nothing to do in COVID. My boat wasn’t being used, so I said, look, go and take it away for a month and go and enjoy it. Which he did. And it was wonderful. And my children will tell you, I’m always happy to lend them my cars. If it comes back dented, I’m not pleased, but it doesn’t really matter. The third person I’ll quickly mention is a very senior City figure today, Paul Manduca, who was my boss at Threadneedle in the 1990s. And what I learned from him was about kind of people management. And I’m not— my IQ has always been much higher than my EQ, but he taught me how important it was to actually manage people. And for example, he would always like— and this isn’t very fashionable today— to have lunch, to have a meal with anybody he was thinking of employing or doing business with. And I increasingly think it’s actually not a bad thing to do that.
Aoifinn Devitt: Absolutely. And I think that I like also within that story you’ve told about your notion of passing on, that when you do have something, someone who’s had a positive influence on you, taking that and passing it on to the next generation. How about any creed or motto that you you have used in your life or live by?
William Bourne: My children will smile. I have a very strong kind of creed. I think it’s a creed, which is you never have to do anything, you always choose to do it. And I think it’s so powerful that because sometimes you do things and it has bad consequences in every kind of way, but if you know you’re doing it because you’ve chosen to do it, it’s so much easier to deal with those consequences.
Aoifinn Devitt: I suppose that Compass is taking some kind of ownership over that action in that case, and as you would say, owning it. So that is very interesting. Throughout your career, which has been quite long, there have been some setbacks, some challenges. Have you had any lessons that you particularly learned from them or investment mistakes?
William Bourne: I mean, we all make mistakes. And if I say I’m very pro-making mistakes, don’t get me wrong, I’d rather I didn’t But as long as you learn from them, there’s nothing wrong with making mistakes. This isn’t quite an answer to your question, but if I were giving advice to somebody, to my younger self or something like that, this is what it would be. By the way, I would not have taken it when I was younger. If you are given some advice which you really don’t want to hear and you really don’t like, just listen to it even more carefully. Because I found so many times people have given me good advice, I have disliked it, and I’ve ignored it. And that’s led to a big mistake in my life. There’s just something else I’d like to say, and that is particularly to younger people: leave time for life, because ultimately it is so much more important than the financial world. And I’ve found that all the people who I have done best in the financial world have tended somewhere to have some other kind of interest or something to take their minds away from Well.
Aoifinn Devitt: That is an excellent place, I think, to bring our discussion to a close. William, I’ve known you, I think, for close to 20 years, and I really enjoyed just learning a little bit more about, about your background here and as the hinterland, as you describe it. I really think you bring a richness to our industry that our industry definitely needs. And thank you so much for sharing your insights with us.
William Bourne: I think, Aoifinn, I think you’re flattering me. I’m not good with flattery, but thank you very much indeed.
Aoifinn Devitt: I’m Aoifinn Devitt. Thank you for listening to the 50 Faces Podcast. If you liked what you heard and would like to tune in to hear more inspiring investors and their personal journeys, please subscribe on Apple Podcasts or wherever you get your podcasts. This podcast is for informational purposes only and should not be construed as investment advice, and all views are personal and should not be attributed to the organizations and affiliations of the host or any guest.
Aoifinn Devitt: This podcast was made possible by the kind support of Alvine Capital Management, a London-based specialist investment advisor and placement boutique. Let’s hear how leaving time for life, such as a passion for bridge and small craft sailing, always seeing a glass as half full, and nurturing relationships weaves together to build an extraordinary career. I’m Aoifinn Devitt, and welcome to the 50 Faces podcast, a podcast committed to revealing the richness and diversity of the world of investment by focusing on its people and their stories. I’m joined today by William Bourne, who is a longtime fellow advisor to the local government pension schemes in the UK and has over 30 years’ experience on all sides of the asset allocation business. He is the founder of Linchpin, which provides advice on investments and governance to institutional investors, and has worked in sales as well as investment roles, including a considerable amount of time spent in Japan. He’s a frequent commentator and participant on the investment advice conference circuit, and a co-host of an occasional webinar series with me in which we bring together a lively group of investors and their advisors. In addition to his substantial investment career, William also has a fascinating what he calls Hinterland, which we’re going to dive into in some detail here. Welcome, William. Thank you for joining me today.
William Bourne: Thank you, Aoifinn. Fascinating may be a bit too strong, but I’m very happy to share what I can.
Aoifinn Devitt: We look forward to it. Well, let’s start with your career, which has been long and varied, and as I mentioned before, both global and hyperlocal, if you think about the work you do in East Sussex. Can you talk us through your journey into the investment world, and did it take any surprising turns along the way?
William Bourne: Yes, I’m slightly horrified to realize I’ve now been working for nearly 40 years. I started working as a blue button on the London Stock Exchange floor. And I can well remember being in the very small boxes which the stockbroking firms used to use off the main floor. And of course, in those days, there was an account system whereby you could buy and sell within 2 weeks and not pay for it. So we all were encouraged to try and make money that way. And I just remember the very first week, not quite the first day, the senior partner in charge of the box said, “William, have a go.” So I did. And surprise, surprise, 2 hours later, the stock had gone up by 10%. That’s how they got me hooked. I didn’t actually enjoy stockbroking very much. So I moved to the asset management side after about 5 years. But I do recall while broking that I was slightly bored and they knew I was slightly unhappy. So I got called in one day and I got asked this question. They said, “William, ‘do you think you could be in Japan and go live there in 10 days’ time?’ Because somebody had decided not to go at the last minute. And I thought for about 5 seconds and said yes. And that has been the start to so many things in my career, including my wife.
Aoifinn Devitt: That’s wonderful, quite amazing, the ability to think on the spot and seize the moment to pursue an adventure. So tell us about your time in Japan and, and what you did there.
William Bourne: Well, again, I was still stockbroking at that stage, the first time I was in Japan, and in those days it was still considered a dangerous posting, so I got extra money for being being there. And it was in some ways very different because of course there was no internet, no mobile phones. The main communication was either by telex or faxes had just started, but I didn’t speak to my family for 15 months. I really saw there were very few foreigners in Tokyo, so when you saw somebody in the street, you just stopped and had a quick chat with them. But it was great fun and the kind of experience which is very hard to have nowadays.
Aoifinn Devitt: This would have been what, in the late ’80s, early ’90s?
William Bourne: This was ’84 to ’89.
Aoifinn Devitt: So there must have been some pretty interesting economic backdrops occurring around that time.
William Bourne: Well, it was right in the middle of the kind of Japanese bull market, and there are distinct similarities with what’s happening in the world today and how markets are going up in Japan in those days. But what I do recall was that as a foreigner in those days, you were very much at the bottom of the pile. If a taxi driver was trying to pick people up late at night, you would be the last person he’d pick up. And when I went back to Japan 15 years later, it was completely the opposite. He wanted you because he knew you would pay well.
Aoifinn Devitt: And I’d be interested to know how your time in Japan, as well as after that, influenced your investment beliefs and maybe your attitude to markets and maybe some skepticism that you bring to bear.
William Bourne: Aoifinn, not hugely. I mean, what it did teach me was how different other parts of the world are to Europe. And in particular, it’s always given me a predilection for investing in Asia, understanding what Asia is doing. I mean, if you talk about investment beliefs, the most important kind of belief which I have, and I’m not very fashionable in this nowadays, is that I’m very much of the monetary school of thought. And what I mean by that is, I believe that investment markets are, to a large extent, moved by the amount of money and credit going in the world. And if you think about it, the last 10 years, central banks have been pushing money and credit into the world. Over— the first thing money goes to or credit goes to is to pay for things, pay for bills, or possibly to invest for future returns. But if there is an excess, it goes into financial markets. And that’s what’s been happening over the last 10 years. And I actually use a data framework which is provided by a research house. And It has been absolutely invaluable, particularly at turning points. And would— I I’m just going to mention two turning points, but there have been many others. One is March 2009, after the global financial crisis. The second is March last year, after the kind of COVID crisis broke. Both times, there was a huge surge of money coming in from central banks. And you virtually knew that a lot of that, the excess of that was going to go into financial markets. But there are many other turning points I could talk to.
Aoifinn Devitt: My history with you is sitting in meetings. I know that you’re not afraid to go against the grain. So that may, maybe your view on financial markets back in March, which was quite a bullish one, maybe that was a bit contrarian at the time. Would you say you are a contrarian for the most part, or how do you characterize your investment beliefs?
William Bourne: Well, I’m certainly, I don’t believe in going with the consensus. It’s not always right to be contrarian and go precisely in the opposite direction. But I do know that probably the number 2, if not the number 1 lesson in investment is if I’m buying something, I need it to feel a little bit uncomfortable, because if it doesn’t feel uncomfortable, I’m probably too close to the consensus.
Aoifinn Devitt: I’d like to just segue from that into the work you do on investment committees and in some of your chair roles. What do you try to bring to the table to those discussions?
William Bourne: I like to think that the outcome from my input will be better decision-making. And I don’t mean by that that I’m always right, because I’m often not right. But I do mean that I will ask the kind of the questions which maybe haven’t been asked by other people. And particularly that I will bring some diversity of thinking to the table. And I think that’s important and the real reason for diversity. Because if you get people who come to the table with different views and who maybe draw different conclusions from a set of facts, you’ll have a much better debate. And that is what leads to better decision-making. I could also talk about experience, etc., but there are many other people who also bring experience to the table, so I’d rather focus on providing some diversity of thought.
Aoifinn Devitt: And how about your role as chair in some of these roles?
William Bourne: When I started acting as the chair of the Pension Board, it was the first time I’d ever chaired a meeting, and I, to be honest, I was a bit nervous. This was 6, 7 years ago. But I’ve realised that to be a good chair, you need to say as little as possible. You need to find ways of making sure that the other people in the room get their chance to say, and your role really is almost to act as a conductor to orchestrate that. Occasionally, you’re going to have to come in and actually say, “Okay, we’ve talked too much about this,” or “You need to think about that,” but it should really all come from the Board members rather than the Chair. And actually, I was on a meeting today with one of the councils I work with. It was a training meeting, kind of, rather than an actual decision-making meeting. But I was delighted to see that I think 5 members of my board were there out of a total of 16. Who was asking the questions? It was very largely the members of my board.
Aoifinn Devitt: Very interesting that I think for chair, as well as getting meetings to run on time, I think seems to be a critical measure.
William Bourne: That’s my other reputation. I don’t always succeed, but I do try to keep to time.
Aoifinn Devitt: You spoke about cognitive diversity, and diversity is certainly a topic that’s very topical, certainly right now, and when we discuss the world of finance, the investment world. What are your thoughts on the diversity that is currently in place in the investment world? And maybe you can reflect on your almost 40-year career in that respect. Have you seen a lot of change?
William Bourne: There’s clearly been a huge amount of change. As I said earlier, I’m a great believer in diversity because I think that’s where you come to good decision-making. I’m not sure that the investment world should offer opportunities for everybody because I don’t think everybody is suitable for it. But I do think very strongly that anybody who does have that aptitude should be given opportunities to enter it and do well in it. What’s changed? I mean, clearly, go back to the 1980s, it was very much about relationships. State the obvious, it was much more male-dominated. It was more about getting to know somebody by having lunch or possibly having a drink with somebody, and far less about your technical expertise. I would suggest that today, the pendulum has swung almost too far the other way. I know my eldest son joined a graduate trainee programme in the City. And by the way, I tell all my children not to go to the City, but he just, he decided simply to disagree with me. But he was the only graduate trainee out of 50 who had an arts background. And I think that is now actually providing the diversity as much as coming from a different colour, different gender, whatever. You actually need diversity of all sorts.
Aoifinn Devitt: And when you mentioned not everybody is suited to the investment world, do you mean by temperament, maybe because of the pressure that it involves, the type of incentives that it involves?
William Bourne: I would argue that the investment world has become far too important. If you go back to when I started, investment management firms, asset management firms were very largely the backwaters within stockbroking firms. You had Phillips and Drew Asset Management. I actually worked for a company called Greaves and Grant, and they had a firm, a set of funds called Barrington Funds. And it went from there to being kind of almost the most important thing in the financial world. And it’s now gone back a little way from that. I think that the financial world should be a subsidiary to the real world and serve its purposes rather than dominating it. And I think that’s part of the problem, that everybody thinks that the money is to be made in the financial world, and therefore many people go into it who probably shouldn’t do.
Aoifinn Devitt: And I’m interested in knowing then how you tie that to what is seen as an increasing influence of investors in corporate governance and corporate actions, essentially through engagement, and the way that institutional investors are seeking to flex their muscle in matters such as ESG concerns. Do you think that that’s appropriate?
William Bourne: Yes, I do. Straight answer. And the reason I say that is because I think capitalism is very slowly morphing from a model where the financial outcome was the only thing really considered to a broader model where other stakeholders’ interests are considered. And obviously one of them is the future of the planet, climate change and things like that. So yes, I do think it is important that institutional investors are able to engage and influence the companies they invest in. I have considerable problems where maybe single-issue activist groups try and kind of hijack the agenda. I think that’s very unhealthy.
Aoifinn Devitt: And tied to that, though, one I know of your pet subjects perhaps would be whether having that kind of an agenda seeking to influence is compatible with passive investing. Can you just tell us your thoughts on that particular juxtaposition?
William Bourne: Let me start by saying I’m not saying that passive investment has no place. I think it has a very valuable place in providing cheap investment. I do think there is a conflict between passive being cheap and the sustainability agenda, and I come from a number of areas there. The obvious one is the point that if you are invested passively, you’ve got no say on whether you actually own, say, a fossil fuel company, you are locked into it for better or for worse. And the passive industry will defend that by saying, well, we engage them and try to make them into better firms. I’m Yeah, sure they do do some, but the problem they have is that engagement takes a great deal of resources and time. And I don’t think it’s possible for a passive fund with maybe 1,000, 2,000, 3,000 firms in it, to engage with all those companies or even a minority of them in any great depth. So what I’m really saying is if they were going to do it properly, they would have to spend a great deal more money on the engagement and therefore they wouldn’t be so cheap. And that’s where I think the inconsistency is.
Aoifinn Devitt: Very interesting. I think we’ll have to park that one for another podcast at another time because clearly there’s a lot we could dive into in terms of whether it be low carbon indices, whether that in fact is a form of greenwashing, etc. If there’s anything else you’d like to say on that, please feel free now.
William Bourne: The modern approach to kind of trying to make passive investment more sustainable is to use low— to try and introduce low-carbon indices whereby through various methods, you’re trying to reduce the carbon emissions from a portfolio. And they almost all depend on some form of scoring. And my problem there is that the data scoring is a very young industry. There’s all sorts of criticisms you can make about it. And that’s The doctor said it has no value. I’m reluctant to place, to invest a significant part of a portfolio on the basis of data which is not really robust.
Aoifinn Devitt: It’s true, and I suppose we also then have the issue that perhaps perfect is the enemy of the good, that we’re not at a level of perfection yet, but perhaps some movement along that direction is better than nothing. Thank you for raising that issue, and I think it’s an issue we will continue to debate. Just going back to some of your experience in startup firms in the financial world, because I think this gets to access, the idea of access as well. What has your experience been in some startups, and have you learned any lessons from that?
William Bourne: I’ve been involved in two startups, no, three startups of my own, and two of them were with other people. And the first absolutely clear lesson I would give to anybody, by the way, both of them really failed, would be be very careful who you decide to start up with and do your due diligence. In one particular case, I had just failed to read the previous board meeting minutes. I’d been provided with them, and I hadn’t read them carefully. And if I had read them, I wouldn’t have joined that particular startup. The third one was Linchpin, which I set up on my own. And setting up on your own is a lonely business. And again, I would say to people who are thinking of starting up, if you possibly can, do it with somebody else. But as per the first thought, Just make sure you do your due diligence on who you’re doing it with.
Aoifinn Devitt: Excellent advice there. Let’s now dive from your current occupation into your hinterland, which we talked about before. One of the surprising things I learned about you during a train ride, I believe from Preston about a year ago, was around your passion for bridge, and not just for playing bridge, but also for teaching young people bridge and organizing camps. I’d love to hear a little bit about that and why you think it is a good skill for young people to learn.
William Bourne: Yes, those train rides from Preston, yes, we both know them well. Bridge, you go back to the 1930s, Bridge was a popular game. It was so popular that the big competitions were watched on, kind of, watched by many, many hundreds of people. And it’s now seen as being a game for old people, and that’s not wrong because it is both good socially and also for mental activity for the over-60s, and I am over 60, so I can say that. In fact, I’ve actually suggested to some people that maybe they should have rebranded bridge during the COVID crisis as kind of social therapy, because it is a wonderful way for older people to keep alert and keep in with their friends. But turning to young people, the one big misconception about bridge is that it’s not exciting. It is unbelievably exciting. I remember taking my youngest son, who by the way is the only one of my children who really plays bridge, aged about 10, 11, to a kind of weekend competition. And I had him at about 10:30, 11 in the evening, playing a game of what’s called speedball bridge, which is playing bridge at about 3 times the normal speed. And he, you know, I left him in a quite impossible contract, which had been doubled and all the bad things that happen at bridge, and he made it. And he’s never looked backwards since. He just so enjoyed that moment. But what does it bring to young people? First of all, it’s always better for young people to play with other young people. They make much more noise, it’s much more fun. It brings a whole range of skills. In particular, mathematics is all about counting. You only have to count to 13, so it’s not difficult mathematics, but you have to do it quite quickly, so you get that kind of practical mathematics. Strategy— you are playing a hand, you’re declaring a contract in bridge, You are in charge. It’s like being the captain of a ship. You can get it right and you can get it wrong. Partnership. You’re always playing with a partner. That again is a really helpful skill. Winning and losing. Sometimes you can make a good play and it can go horribly wrong. Sometimes you can make a bad play and it can go right. And learning to win or lose with grace and with your partner is a real social skill. And I have run over the last 3 years, 4 years, I’ve run 2, and it would have been a 3rd one last year, events for young people whereby we get together between 50 and 100 young people for a weekend of solid bridge, and you’d be amazed how much bridge they play in just 2 days. My bridge club is actually next week playing against a young Zambian side. They were approached and they thought they should offer it, but it is very important for young people to play with other young people, not with the oldies.
Aoifinn Devitt: How interesting. And how long does it take to become proficient in bridge? Is it relatively easy to learn?
William Bourne: It’s like a lot of other sports that you can get to a level, but there’s always another level and another level. What is good about bridge is that once you’ve reached a fairly moderate level, you can play against almost anybody else right up to the international champions, and in that respect it’s a little bit like golf. It is a little tougher to get from zero, you know, point zero, to getting to a moderate level, It does take time, and I think, to be honest, the way that it’s taught sometimes in this country could be improved.
Aoifinn Devitt: It’s, I think, interesting with the new interest in chess thanks to Queen’s Gambit on Netflix. Maybe there’ll be a resurgence in interest in bridge. You might want to try to use that as a marketing strategy.
William Bourne: I’ve used chess as a kind of, you know, as an example of what the bridge powers that be should be doing. You’re quite right.
Aoifinn Devitt: No, it’s interesting because I think also decision-making, risk-taking, and also, as you said, grace in losing and in winning, these are all really interpersonal skills, as well as important skills for life that I think when they can be learned in a setting— and can it be done effectively in our current remote existence?
William Bourne: Yes, there’s a lot of online We’ve bridge. All— because we can’t meet people, we’ve all had to go to online bridge, and the traditional platforms have tended just to be a computer program, which work perfectly well. You can chat, you can play, but increasingly the latest platforms have now got a video feed as well. So as well as actually playing bridge, you can see your partner and you can see your opponents. That again is really helpful for both the elderly and also for the young.
Aoifinn Devitt: And you spoke about a young person learning to be captain of their ship, and that’s a segue to another aspect of your hinterland, which has been sailing. Can you talk about some of your small craft sailing that you’ve done and some of the adventures it’s taken you on?
William Bourne: Well, go back to the 1970s, and in some ways the 1970s are a little bit like you here when, know, like now, because we can’t go to Europe. In those days, we couldn’t afford to go to Europe. And the easiest way to get a holiday was actually to get onto a little boat. And I spent a lot of my youth sailing around the coasts of England and in fact Ireland as well. And I say a little boat, I mean a very little boat. It was bigger than a dinghy, but not a great deal bigger than a dinghy. Anybody who does sail, if they know what a folk boat is, it was a slightly larger plastic version of a folk boat. Even today, and I have a boat, I have a small boat today as well. Over the years, the strongest memories I have in my life are almost all from sailing. They’re not all good. Sometimes they’re bad. I was in the, for example, the famous Fastnet 79 Gale when, you know, sadly a lot of people lost their lives because a storm is middle of August, but a really bad one. Depression caught up with another depression and caused a very sudden storm.. I was in the class which was right in the middle of it. I got washed overboard, but luckily I got washed back again. But that’s a bad memory from sailing. I’ve also had the most wonderful memories. I was lent a boat by some friends aged only about 25, 26, and I took a summer off to go sailing around Iceland in it. And I’m so grateful to them for having lent me the boat because I could never have afforded it. But again, I have never regretted sailing around Iceland with a whole host of friends. They all— friends came for 2 weeks, 3 weeks, 4 weeks. And again, seeing things we had never have done, never done otherwise. So one of my kind of lessons for young people today would be don’t be afraid to go and do something like that. Don’t feel you have to stay stuck at work.
Aoifinn Devitt: Must have been fascinating. Let’s say it never got dark in Iceland in the summer. But also, what is it with sailing? When you have an experience like that, like you mentioned in the Fastnet Race. Do you have to, metaphorically speaking, get back on the horse? Do you have to get back out there? Did it have any kind of impact on you, or did it just kind of seem like part of the experience?
William Bourne: I think I was so young, it didn’t really have much impact on me. I’m much more aware of what could happen bad today than I was then. So I’ve also had other things. I’ve actually been shipwrecked too. I was simply a crew member. I wasn’t the captain, but I was in the Bahamas. We’d been sailing. This was— I’d flown out as a crew, and we’d actually been in Haiti, which is a strange place to go in a yacht, but we’d had an interesting 3 or 4 days. We’re sailing across the Bahamas, and in the middle of quite a lot of wind, but not, you know, not a gale or anything like that, middle of the night, the boat suddenly hit a rock, or hit a reef, and we did not know where we were, because in those days there was no GPS. And I was interested to read in the paper the other day that 3 people had been rescued from a reef, having been stranded there for 33 days. And I wondered whether it was the same one, but I checked it out and it wasn’t. And in fact, it wasn’t a reef, it was actually the end of an island. So I then had, with one of the other crew members, I had to walk for— I think it was probably only about 12 miles, but I can promise you, if you’re walking for 12 miles in soft sand, it feels like a great deal longer to try and get help. And we got help, we were rescued. But that again was a kind of, you know, kind of, I will remember that experience till the day I die.
Aoifinn Devitt: It certainly makes me happy to be alive. Well, let’s just get back to some of the other influences in your life besides these fascinating other activities. Were there any people that had a particular influence on you and how?
William Bourne: Yes, it’s interesting. I mean, I’ve tended to plow my own furrow. There are people who’ve had an influence. I will go through 2 or 3 of them. There’s nobody who’s been a kind of mentor throughout my life. And the first person I would mention would be my godfather, who’s called John Colfox. And he was a kind of fairly typical English squire in West Dorset. But he had the most wonderful qualities. And what I learned from him was always to be a glass-half-full person. You know, he had some bad things happen to him in his life, but he always remained cheerful. And he also always, although he came from the establishment, he was always happy to have the time for anybody. And that’s something else I’ve tried to learn from him. I think the second couple I would mention, and these are not people I would— and John was, I was really close to John, he was kind of my other parent. The second couple I will mention was very different. They were the people who lent me this boat because they lent me, they gave me such an opportunity. And what I’ve learned from them is not to be too possessive about possessions. I lent my boat to a young 23-year-old last year because he was stuck, he had nothing to do in COVID. My boat wasn’t being used, so I said, look, go and take it away for a month and go and enjoy it. Which he did. And it was wonderful. And my children will tell you, I’m always happy to lend them my cars. If it comes back dented, I’m not pleased, but it doesn’t really matter. The third person I’ll quickly mention is a very senior City figure today, Paul Manduca, who was my boss at Threadneedle in the 1990s. And what I learned from him was about kind of people management. And I’m not— my IQ has always been much higher than my EQ, but he taught me how important it was to actually manage people. And for example, he would always like— and this isn’t very fashionable today— to have lunch, to have a meal with anybody he was thinking of employing or doing business with. And I increasingly think it’s actually not a bad thing to do that.
Aoifinn Devitt: Absolutely. And I think that I like also within that story you’ve told about your notion of passing on, that when you do have something, someone who’s had a positive influence on you, taking that and passing it on to the next generation. How about any creed or motto that you you have used in your life or live by?
William Bourne: My children will smile. I have a very strong kind of creed. I think it’s a creed, which is you never have to do anything, you always choose to do it. And I think it’s so powerful that because sometimes you do things and it has bad consequences in every kind of way, but if you know you’re doing it because you’ve chosen to do it, it’s so much easier to deal with those consequences.
Aoifinn Devitt: I suppose that Compass is taking some kind of ownership over that action in that case, and as you would say, owning it. So that is very interesting. Throughout your career, which has been quite long, there have been some setbacks, some challenges. Have you had any lessons that you particularly learned from them or investment mistakes?
William Bourne: I mean, we all make mistakes. And if I say I’m very pro-making mistakes, don’t get me wrong, I’d rather I didn’t But as long as you learn from them, there’s nothing wrong with making mistakes. This isn’t quite an answer to your question, but if I were giving advice to somebody, to my younger self or something like that, this is what it would be. By the way, I would not have taken it when I was younger. If you are given some advice which you really don’t want to hear and you really don’t like, just listen to it even more carefully. Because I found so many times people have given me good advice, I have disliked it, and I’ve ignored it. And that’s led to a big mistake in my life. There’s just something else I’d like to say, and that is particularly to younger people: leave time for life, because ultimately it is so much more important than the financial world. And I’ve found that all the people who I have done best in the financial world have tended somewhere to have some other kind of interest or something to take their minds away from Well.
Aoifinn Devitt: That is an excellent place, I think, to bring our discussion to a close. William, I’ve known you, I think, for close to 20 years, and I really enjoyed just learning a little bit more about, about your background here and as the hinterland, as you describe it. I really think you bring a richness to our industry that our industry definitely needs. And thank you so much for sharing your insights with us.
William Bourne: I think, Aoifinn, I think you’re flattering me. I’m not good with flattery, but thank you very much indeed.
Aoifinn Devitt: I’m Aoifinn Devitt. Thank you for listening to the 50 Faces Podcast. If you liked what you heard and would like to tune in to hear more inspiring investors and their personal journeys, please subscribe on Apple Podcasts or wherever you get your podcasts. This podcast is for informational purposes only and should not be construed as investment advice, and all views are personal and should not be attributed to the organizations and affiliations of the host or any guest.
