Obituary - Greg Jones
The man who has been described as "New Zealand's Mr Absolute Returns" man, Greg Jones, died recently after a long illness.
Monday, April 17th 2017, 6:45AM 1 Comment
Greg hasn't been seen around the industry for a long time, due to poor health. However, he has left a mark of the industry, especially around absolute returns as an investment strategy. Talking to his friends and peers he was held in high regard and considered one of the most "authentic" people in the industry.
One memory is of how Greg and his colleagues scoured the world looking of investment talent. These overseas trips were followed up with lengthy, and informative reports.
The following largely comes from an article which was published in the INFINZ journal a number of years ago. I think is sums Greg's legacy well.
In 1991, Jones and his cousin David founded New Zealand Asset Management (NZAM), after the 1987 crash and resulting recession in New Zealand had destroyed investor confidence in the stock market and depressed the availability of cash in general.
“Some people undoubtedly looked at us sideways at the time, but in many ways it was a great time to start a business,” remembers Jones. “Office space was cheap, business start-up costs were minimal, and we had some beliefs from our previous job that would stand us in excellent stead.”
Those beliefs, gained under the guidance of flamboyant, iconic stockbroker Frank Renouf, helped cement two life-long principles: one, that investors can’t tolerate losses, and two, that there was a lot of offshore talent that New Zealand investors could tap into with the right conduit.
“There had been absolute carnage in those four years between 1987 and 1991 in the economy and the local markets, and it bred a generation of people who would be put off investing for decades,” says Jones.
“The way to win clients was to offer something that avoided the ups and downs and volatility of the traditional stock-broking model, preserved capital and delivered sustainable returns in a reasonable time.” ‘Absolute returns’ investing, as conceived by Greg Jones and his business partners, could only fulfill this philosophy by building relationships with boutique fund managers across the globe.
And the group literally scoured the world to seek them out. Alan McChesney joined NZAM as a principal and director after David’s tragic death in 1995.
Together, Greg and Alan have since travelled for three months of each year finding fund managers that fitted their ideals.
McChesney says Greg Jones has had an unfailing belief in absolute-return strategies throughout the last 21 years, even when the industry was deeply entrenched in advocating relative returns.
“From being a lone voice for many years, we are now beginning to see a number of others supporting the philosophy and launching similar strategies – and that has to be testament to how well conceived it was in the first place,” says McChesney.
Jones says being a New Zealand firm helped pave the way for NZAM in many offshore markets. “Fund managers would tend to down tools and meet with us, spend time with us, when we had come all the way from New Zealand rather than just down the road, and so we used that to our advantage.”
Greg has diagnosed with motor neuron disease about seven years ago and died recently.
His concluding comments in the INFINZ article sum his vision up well: “Investment for me has always been an art, not a science – it’s like coming to work every day to solve a puzzle, knowing that even if you solve it, it’s likely to break up again anyhow and require resolving.”
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