64: Vontobel's Matt Benkendorf – Investigative Journalism, Quality and Divestments
In episode 64 of the [i3] Podcast, we speak with Matt Benkendorf, CIO of Vontobel Quality Growth, a global equity strategy of Vontobel Asset Management. We spoke about the firm's unusual deployment of investigative journalists, how to create thoughtful portfolios when divesting tobacco and, of course, learnings from the global pandemic. Please enjoy the show.
Overview of Podcast with Matt Benkendorf, Vontobel
1:00 How did you get started in investing?
2:00 Working in my parents landscaping business taught me how to work hard
5:00 I initially enjoyed fixed income more at university
6:50 Just had my 22 year anniversary at Vontobel
7:30 Bringing investigative journalists into the investment team
11:30 Intelligence, whether it is book intelligence or SAT scores, doesn’t naturally correlate with investment success
13:00 That devil’s advocate view is important to remain balanced.
14:50 Everything has hair; you don’t want to be too negative
17:30 How do you prevent too much negativism?
20:30 Dealing with divestments
23:30 Engagement is the most powerful force to change
27:00 Ironically, you can substitute tobacco companies with defensive growth companies in health care
28:45 What is quality and what is it not?
33:00 How has the pandemic affected your investment philosophy?
35:30 The pandemic was a real wildcard
36:50 Coming out of the pandemic, who would have thought you would have record car purchases; big ticket items?
39:50 Nobody, in their modelling, predicted a period of zero revenue
40:30 It came down to accessible lines of credit, terms of lines of credit and how could they get cash burn rates down
41:30 The coiled spring of returns; returns are made in down markets, not up markets.
43:50 COVID was terrible and came at a big health toll, but for investors it gave them the opportunity to reshuffle the deck.
45:00 The more things change, the more they stay the same
49:00 Not everything has recovered yet and this provides low hanging fruit
52:00 It is now later cycle with a lot of warning signs flashing