New head of portfolio management team

When I meet Alexandra Morris, she has just participated at her first quarterly analysis meeting with the team of 24 portfolio managers that she has been heading up since 1 September. She has the ultimate responsibility for all 12 fund teams' investment decisions and results. And for the first time, SKAGEN's portfolio managers have a dedicated, full-time head of department; previous investment directors have held a joint role as portfolio managers or CEO alongside the investment director role.

Close to clients

Being investment director means creating the conditions for good teamwork and collaboration between the various teams. It is both an operational and a strategic job.

"Ideally, I will shield the portfolio managers from administrative tasks insofar as possible, enabling them to devote their time to their core activity. I am still in the learning phase, but hope to soon be on the road meeting SKAGEN's clients," says Alexandra Morris.

The portfolio department has grown over recent years, from a small group of portfolio managers and founders who had the investment philosophy running through their veins and all the information stored in their heads, to what it is today. Previously there was less need for process descriptions and clear structures.

"But not everybody can start out being a Kristoffer Stensrud. New members need a framework; intuition comes with age and experience," she explains.

Clearer picture of the investment philosophy

Alexandra Morris is careful not to get ahead of herself, but says that she wants SKAGEN to be even clearer about explaining its investment philosophy. A simple explanation is that SKAGEN invests in undervalued, under-researched and unpopular companies. But how in the investment process do portfolio managers differentiate between poor, unpopular companies and good, unpopular companies that have the potential to create value? What are they looking for specifically when they analyse companies?

"Sometimes we also buy popular companies; but in these cases we have a clear perception that the market has wrongly analysed them. This is some of what it means to be contrarian and swim against the tide. These are things I want to learn more about," she says.

Why do you believe in bottom-up, value investing?

"Taking a bottom-up approach generates returns over time. It is not the only way to achieve good returns, but it is a safe way. Value investors often know their companies better than other investors; they think long-term and do not speculate with their clients' money. It is a question of looking at a company's fundamentals, going ten years back in time, rather than being distracted by the current short-term sentiment in the markets."

Responsible investing

Alexandra sees the added value in investing responsibly and taking ESG (environmental, social and corporate governance) issues into account. Companies that are successful within ESG, act in their shareholders' best interests, treat their employees well and thereby attract the best talent.

"These companies are outpacing their competitors and they create value. Some may regard ESG as a burden, but I see it as essential for generating returns in the long term. It is gratifying that SKAGEN's funds have received such high ESG scores."

Independent, in clients' best interests

SKAGEN was not an unknown name for Alexandra Morris when she was asked to take on the role of investment director, and she says that she has "admired the company from afar". During the course of her career, she has sat on all sides of the investment table – as portfolio manager, broker, investor relations director as well as investment director – and has followed SKAGEN since the 1990s. She says that it gives great freedom to work in an independent company that both wants and has the mandate to do what it believes in.

Portfolio managers often have dual roles; they are investors in a company via their fund's portfolio as well as lenders to the company. Regardless of how many Chinese walls there are, it can be difficult to, for example, vote against a company's management even if it is in the shareholders' best interests. 

Daring to take risks

Alexandra emphasises the importance of having a portfolio team that has both self-confidence as well as an environment of trust so that the portfolio managers dare to take risks. However, it is equally important to have a strong sense of risk awareness. She draws parallels with the Norwegian women's handball team that she recently saw playing at the summer Olympics in Rio; someone has to push forward and have the courage to attack, even if it doesn't lead to a goal each time. At the same time, someone has to defend the goal.

Alexandra herself dislikes making mistakes and is very competitive, hating to lose at anything.

"I have of course made mistakes as an investor and regretted it sorely whenever this has had an impact on clients. The warning signs are always there, but it is easy to fall in love with your stocks. You have to have a strong conviction about the holdings in your portfolio and really understand what kind of companies you own," she says.

"However careful you are, events can always surprise you – in the form of a terrorist attack, Brexit or geopolitical unrest. However, these risks have always been there, we live in an uncertain world and it wasn't any better in the past," concludes Alexandra Morris.

Hard work

One lesson Alexandra has learned from her professional life is that success finally comes down to working hard, thinking holistically and being a team player.

"Just like the handball team, we have to be proud of each other and make use of each other's strengths."

About Alexandra Morris

• Master's degree from the University of St Gallen, Switzerland.
• Has previously worked for Nycomed Amersham in London 2000-2004 and launched Odin's European fund in 2004.
• Joined DNB Asset Management in 2015.
• Has recently bought an apartment in Stavanger which she commutes to weekly. Lives in Oslo with her husband and two dogs at the weekend. Three grown-up children.
• Born in Birmingham, Alabama with US-Norwegian parents.
• An active veteran tennis player