5 Minutes With: RWC's John Teahan

This week John Teahan, manager of the RWC Enhanced Income fund, explains how he sticks to his value investing strategy, and why careful stock selection is so important

Annalisa Esposito 30 August, 2019 | 9:47AM
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 John Teahan

John Teahan, 41, joined RWC from Schroders in 2010 and currently co-managers the UK-focused RWC Enhanced Income fund. The fund has just a one-star Morningstar rating and is down 1.5% year to date, with an annualised return of 1.9% over five years; however it has a decent yield of 5%. Top holdings including Tesco, Marks & Spencer and BP.

What does the fund do?

I manage a number of the strategies but the enhanced income fund aims to deliver a high income and some capital protection.

What is a stock you’re currently excited about in the portfolio?

Outsourcing group Capita (CPI). The company faced many issues, which had built up over many years including a very weak balance sheet and a complex company structure. A new chairman was appointed in 2017 and he, in turn, appointed Jonathan Lewis as the new chief executive and the issues are being fixed. 

What is your best ever investment?

The dinosaur tech firm Microsoft (MSFT). People were negative on the company; they thought it wouldn't last. We bought shares in October 2010 at $25 and we sold when they reached $125.

And your worst?

It was a personal investment I made in 2007 in a drink company called C&C Group (CCR) – I thought it was reasonable value but its earnings subsequently halved. I’m still well under water more than 10 years later.

What’s the stock you didn’t buy that you wish you had?

As a value investor, there are some growth stocks I wish I could have bought but I have to stick to my value philosophy. It has been a difficult period for us, with growth outperforming value over the last decade.

What’s the most important lesson you’ve learned?

To be very careful when I buy stocks. I’ve had amazing mentors who have showed me how to become a value investor – I’ve learned from them, stock by stock, day by day.

What do you do in your spare time?

My three young children keep me occupied - the youngest is 20 months and the oldest turned seven this week. I'm also a Fulham season ticket holder.

If I weren’t a fund manager…

I studied economics and politics, and I find politics and policies fascinating. I am interested in how we can create more equality, opportunity for people in education – this would be definitely something I would focus on.

What’s the best thing about this industry?

The people I work with, who are inspiring and have helped me develop. And the industry itself, which gives me exposure to a fantastic diversity of topics and sectors.

And what’s the worst?

We don’t always live up to the standards we set ourselves, we could do better in that perspective. We manage other people’s money and that should always be the focus, but sometimes it slips our minds.


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Annalisa Esposito  is a data journalist for Morningstar.co.uk

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