Meet the Manager: Real Return’s Suzanne Hutchins
How did you end up pursuing investing as a career?
I started as a global analyst, researching equities among a team of three others. We would identify global opportunities, across industries, and create a model portfolio of ideas that portfolio managers would put to work. After completing investment certifications, I progressed and eventually shadowing a manager who was keen to train some younger employees before retirement. He was meticulous, detailed and highly disciplined. He also had a lot of experience, having invested through the Japanese market bubble and subsequent crash.
After three or four years with my previous firm – in the 1990s – I was given the opportunity to work directly with Stewart Newton, the founder of the firm, on multi-asset portfolios. As he became less involved in the day-to-day of portfolio management and more focused on the business which he subsequently sold, I began managing his multi-asset portfolios for the client base. At the time, I also worked closely with the CIO and went on to manage the UK equity team in addition to other leadership roles.
What has past experience outside of portfolio management taught you?
What was your first foray into fixed income?
What do you like about working in asset management?
How do you cut through the noise?
Is there a familiar connection between your passions (outside investing) and multi-asset investing?
I think multi-asset investing is kind of like painting a picture. Every component is important to the whole and it may not make much sense viewing any part in isolation. You really need to see the full picture to understand the entire portfolio as well as how each part complements one another. I’ve come across people who think in boxes – in a rules-based fashion, but I don’t think anything about investing is cut-and-dried. I
believe people who think in constraints have trouble understanding the concept of multi-asset investing. Markets are constantly changing and evolving – they are social systems as much as economic, and, just like art they create a picture, an environment that can be constantly in flux. In my opinion, you need perspective to navigate your journey and have an idea of your road map, but still be flexible as market conditions change.
In summary, there isn’t a one-size-fits-all – but for businesses with good tailwinds and structural growth opportunities, I look at their PE multiple relative to other growth prospects, in other words, the PEG ratio. I look for businesses that generate cash and I aim to identify how they’re allocating that cash; if they’re reinvesting back into the business; if they’re allocating capital efficiently; whether or not they’re paying back shareholders with dividends, and if they’re buying back their own shares. Analyzing cash management is key in terms of assessing the viability of capital allocation decisions within a business. Cash is cash.The ‘E’ (= earnings) can always get manipulated. However, great companies exist within the start-up universe that don’t pay dividends. There isn’t one rule that applies to all businesses; it varies stock-by-stock.
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