“So you’re really doing this?” I asked the chairman of the insignificantly sized investment company TwoHoots Asset Management, when I visited his office the other day to congratulate him on his new venture. “What’s that face for?” he replied – a little defensively, I thought. “I’ll have you know ‘this’ happens to be the last word, so to speak, in asset management-based creative disruption.”
He paused for a moment, before adding: “Or is it ‘disruptive creation’? It’s a tricky one to remember.” “Maybe it’s both,” I said helpfully. “Two for the price of one, eh?” the chairman perked up. “I like your thinking.” “Speaking of which, what’s your thinking behind the new project?” I asked. “Compared with the previous outing, TwoHoots seems rather less … what’s the word? Whole-hearted? Unstinting? Enthusiastic?”
“Devoted? Impassioned? Unquestioning?” the chairman offered in return. “Well – setting aside for a moment how many of those adjectives you might deem prudent to include in any investment process – I think it all depends on your point of view. Don’t get me wrong, responsible investing worked very well for us for a while – right up to the moment, in fact, that it didn’t – but it wasn’t really …”
He paused again, as he groped for the right word, but this time the silence was broken by me. “You?” I suggested. “Exactly,” the chairman nodded. “It wasn’t really me. As I say, this whole ‘thinking of others’ idea had a certain novelty appeal but it only lasted a while – almost exactly, one can’t now help but notice, the same amount of time the money kept rolling in.
“Heck - next time your pet needs an op and the vet tells you the only way to cut back the eye-watering bill is if you are prepared to skip the anaesthetic, text us their number.
Back to basics
“Still, now I am girding my loins to do it all again, it makes sense to go back to basics. So, instead of giving my life to all those ‘nice-to-haves’ that took up so much of my attention last time – you know, people … principles … planet … all that sort of thing – the precise quantity of what I shall now be giving is set out in the company name.”
“What a deeply moving origin story,” I nodded, pretending to dab away a tear. “And dare I ask if this has yet manifested as an investment philosophy and/or process?” “How could you doubt it?” the chairman smiled. “Not that we are setting out to reinvent the wheel here – if something isn’t working for you as an investor, what is standard operating procedure?”
“Dump your whole plan and do the precise opposite?” I laughed. I should have known better. “Got it in one,” enthused the chairman. “So whereas last time we were assiduously doing all that long-term capital allocation jolliness for the benefit of every stakeholder or whatever, this time it is all about the short term, the scattergun and the bandwagon – and the only stakeholder benefit we are worried about is our own.
Impatient capital
“So every instance of impatient capital – we will be there, tapping our foot. Every company whose CEO is paid on insane multiples of the median employee salary – more power to their elbow. Every bank that pays out 20 times in management bonuses what it does in dividends every decade – show us how you did it. Every instance of ‘for the few, not the many’, run it up the flagpole and we will be there saluting.
“And that goes double for private assets. Every time we see money syphoned away from the front line of water companies, care facilities, infrastructure or whatever and towards shareholder pockets – we will be jostling to be first in the queue. Heck – next time your pet needs an op and the vet tells you the only way to cut back the eye-watering bill is if you are prepared to skip the anaesthetic, text us their number.
“To coin a phrase, ‘crapitalism’ is the philosophy. We may be late to the party but, trust me, now we are here, we plan to minesweep every last glass we can find.” This time, the silence went on longer. The chairman sat beaming, lost in his visions of a future fortune, while I mused on my failure to build on my own – arguably genuine – coining of ‘crapitalism’ a dozen or so years ago. A day, perhaps, for second chances all round.
