Colin Melvin:

016 – Changing an Industry, Institutional Investors, The Fifty Trillion Dollar Man with Colin Melvin

Colin Melvin:

016 – Changing an Industry, Institutional Investors, The Fifty Trillion Dollar Man with Colin Melvin

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Colin Melvin is the Global Head of Stewardship for Hermes Investment Management as well as the Founder and Chairman of Hermes Equity Ownership Services. It is Colin’s mission to innovate and create successful stewardship for large institutional investors, enabling them to be active engaged owners of the companies in which they invest. Colin describes why there’s such a huge disconnect in this industry and what he and his team do to help change that.

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Colin Melvin is the Global Head of Stewardship for Hermes Investment Management as well as the Founder and Chairman of Hermes Equity Ownership Services. It is Colin’s mission to innovate and create successful stewardship for large institutional investors, enabling them to be active engaged owners of the companies in which they invest. Colin describes why there’s such a huge disconnect in this industry and what he and his team do to help change that.

Colin Melvin

Colin is an inspirational thought leader and visionary agent for positive change, who has been at the forefront of global developments in corporate leadership, stewardship and sustainability and responsible asset management for over twenty years. He has international experience from the investor and corporate perspectives in challenging strategy, promoting effective risk management and corporate governance and developing well-aligned incentives. He also has a strong network of contacts at the most senior levels within the world’s largest investment institutions and listed companies. A wealth of expertise in building trust and adding value to boards in industries with particular stakeholder challenges having worked with companies to improve their relationships and performance.

What Was Covered

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I’m really pleased to have Colin Melvin as my guest today to talk about institutional investors. Like many of our guests on these shows, Colin has led change and created something new. The difference with Colin’s Story is that his career for the last two decades has not been so much about changing a business, but changing an industry and this is not any industry. This is one that affects huge corporations in every sector across the globe. Colin is chairman of the equity ownership service side of London-based Hermes Investment Management and the head of its newly designated Stewardship project. We’ll discover what all this means shortly. But first some figures, in this role he guides some of the management decision for 250 billion dollars’ worth of corporate investments. If that is not a gargantuan enough figure to play with, Colin was the founding chairman of the United Nations Principle for Responsible Investment an accord that now represents around $50 trillion of investment assets. Colin, it’s great to have you with us.

It’s a pleasure to be here with you. Thank you.

Let’s just take a few moments first for us to understand the role you and your organization play in the financial world with institutional investors. You don’t actually make investment decisions but rather engaged by these investment businesses to advise institutional investors on how they can collectively work together to influence their operations and activities of the businesses in their investment. Is that correct?

That’s right. Yes. So our decision is to engage with the company on behalf of this group of pension funds. Our clients at Hermes EOS are 45 pension funds and we engaged on their behalf in a collaborative way. So it’s a bit like a coalition or a collaboration whereby the pension funds aggregate their shareholding in companies through us and we then apply resource which is greater than any one fund could afford. It benefits them all. So the program is one of stewardship and that is stewardship of the company that’s owned by the pension fund, on behalf of the pension fund and to promote good behaviour by the company which should lead to better returns in the longer run.

We’ll come to this sort of behaviours just in a moment but these firms are clearly extremely powerful. I mean, carrying the voting rights for billions of dollars of shares and different stock markets around the world. Why can’t these institutional investors, or don’t they want to make these decision themselves?

Well, the institutional investors make the decisions collectively for a couple of reasons. One, they recognize that by working together they can do more. So even a very large pension fund tends to have a fraction of 1% of the shares of a very large company. But if they work together they can aggregate that through us into a large proportion. Maybe 1%, 2%, or 3%, depending on the size of the company. So that gives them more opportunity for change. The other though is that there is a tradition within the investment and industry of spending money more on transactions on the buying and selling of things than on relationships. That needs to change and you could see the service that we’re providing is part of that change and it’s a shift in focus from the short-term to the long-term as well. So instead of focusing on short term transactional behaviour, it’s more to do with the relationship with the company as shareholders but also the relationship that the company has itself with its stakeholders and then how improving those relationships can lead to an improvement in the outcome for the investor, as well as the economy, society, and the environment, all at the same time.

“They [institutional investors] recognize that by working together they can do more.”

So, the drive for that though is coming, you think, from outside, externally from the wider world or is there something intrinsic within the pension funds that they want to do this?

I see this as kind of a societal shift. We, around about the time of the financial crisis, regulators in the UK and around the world realized that the banks that were failing and bringing down economies, or potentially so, had owners and shareholders and who were those shareholder owners? Well, they were us through our pension funds and our savings. There seemed to be a disconnect than between the interests of the underlying owner, the pension fund beneficiary, and the company that was owned, the bank and, indeed, the other companies that were owned and connected to that bank. That shift in understanding has been playing through since 2007, 2008, 2009 and has led to new regulations which encouraged pension funds to be better owners of companies and I think it’s alongside of that a growing understanding in the public at large that we can’t continue to run the capitalist system the way we’ve been running it. It leads to really very poor outcomes.

The institutional investors need to shift.

Where large companies that we all invest in through our pension funds are involved in bribery and corruption, involved in environmental degradation, child labour, or modern slavery in some cases, avoiding paying tax and all of these things to some extent, in our name and presumed to be a benefit to us because they maximize the short term value of the shareholding. That’s just a very poor outcome because of course, pension funds invest for the long-term and with a pension fund with twenty to thirty year liabilities, shouldn’t be concerned about the short term performance of the companies they invest in.

So that disconnect, I think there’s are a shift in understanding. I kind of what I would have called in my early career as a historian, a hegemonic shift. A shift in the language and the ways in which we understand our jobs in the investment sector, which is leading to more of an engagement with the companies, less of a transactional focus and that’s the reason we have the service and we set it up 11 years ago here but it’s really growing quickly now. We’re getting a lot of big pension funds coming to us, asking for us to help.

It’s interesting. There seem to be two sort of pivots there. One, the short-term, long-term balance that you’re trying to shift them towards. And also this change, societal change that you recognized between the transactional and relational interactions. I’ve never really thought about it before it clearly there’s a big connection between those two things and the relationships ought to be longer term and transactions are sort of instantaneous. They’re one-off. So there is a connection there, isn’t there?

Better relationships among institutional investors means better value for all.

Yes. I think so, and most of the dysfunctionality within the investment system arises from short-termism of one kind or another linked to transactions. It is extreme, of course. You’ve probably heard of ‘dark pools’ and ‘high frequency trading’ and so on, which really doesn’t have any social utility but it still happens and it often happens with money that you and I, and many others in the economy and society, have invested. So it seems that we’ve created a transacting machine in the City and in Wall Street, which transacts at a frequency which it can determine, and which transactions it benefits from, because it’s paid fundamentally for the transactions. Where the proper functioning of the financial system and the investment markets should be the allocation of capital efficiently and effectively within the capitalist system, within our economy, to sustain and enable development and growth of the companies that we save through and work within.

So there’s a problem there and, as I said, we then need to shift our focus from the short-term transactional behaviour to longer term relationships among these institutional investors. It’s not that there shouldn’t be any transactions; of course we still need to transact. But it’s a question of what’s important and what we focus on. If we can encourage the large companies that we all invest in for pension funds to have better relationships with their employees and their suppliers and their customers, and indeed the shareholders and other stakeholders. Those improving relationships lead to the improvement in the value of the firm over time and that’s, I think, a much better understanding of how value is generated within the new economy.

Do the pension funds, or are the pension funds, in a position to instruct the asset managers, their investment managers to transact less? Does the governance of the pension fund do they cover that? Because it seems to me that the transaction side is very driven by the City, the tradee approach.

Really a bit of a situation of supplier controls. So the clients of the City, by and large, take the terms offered to them. There’s a lot of tradition here and the assumption is that this is the right way to behave. As I say, I think people are saying that these need to shift but the tradition is that money is managed on a short-term basis. So even if the pension funds gives a mandate a year or so to the fund manager, often the fund manager is concerned about that contract being terminated at short notice, relative to short-term, poor investment performance and that performance is measured quarterly. As you’re aware, many companies that provide quarterly reports to sustain this approach.

So you have this, again, short-term approach within the relationship between the institutional investors and the company which is, I think, detrimental to corporate success. If you’re the chief executive or finance director of a medium to large company in the UK, for example, your experience of talking to your owners, the shareholders is really not very good. You find you’re talking to people who are far more interested in getting information about next quarter’s earnings than they are about the people in the business or the longer term strategy and so on and that’s such a huge missed opportunity because, of course, our fund managers are often very knowledgeable, well educated people and many of them could do a job which is far more interesting and useful than they’re presently able to do. In some ways, it’s a return to the way investment used to be which was far more relational than it is presently.

No, I see that completely. That’s clearly all tied in with this ESG investing Environmental, Social, and particular here on the, Governance side, which is underlined the Principles for Responsible Investing at the United Nations that you were a coauthor in putting together part of that 10, 11 years ago.

11 years ago, yeah. So, the 10th anniversary was just a couple of weeks ago, really.

Oh, alright. Congratulations.

Thank you.

And that is focusing on more active ownership with this wider societal sense to it. But, again, the drive from that came from where? I mean, was it from within the finance industry or were you having to change, UNPRI and yourselves, having to reeducate, change the pension funds themselves from the status quo that they’re currently in?

Well, there’s a small group of about 25 funds involved in the initial phase of this. So, going back to 2004 or 2005 when we drafted the principles and they were based on a set of principles that the United Nations, which focused on companies, called the UN Global Compact. This is a set of 10 principles for companies around their behaviour and, at least, the treatment of the workforce environment, human rights, more broadly and so on. The UN Global Compact was very successful. It now has 8,000 companies signed up to it and most of the world’s largest companies have committed to these principles. So, it’s a very significant initiative and so what we wanted to do is to bring something in similar for the investment world. So, if we could find some principles for responsible investment, which is what they’re called, then that might benefit the investment and the economy and society more broadly.

There are six principles of the PRI: the first two are the most significant, I think. The first one really incorporates what’s now known as ESG, as you said environmental, social, governance factors into our investment decision making. Really meaning more qualitative rather than purely quantitative analysis; and the second is we’ll be good owners of the assets that we invest in; on the understanding that good ownership or stewardship as it is now known will lead to a better outcome. So, you’re engaging with companies at a very senior level to get a change where change is needed to improve their performance over time.

I’m really interested in that change. I mean, what you are doing is trying to create change through these principles; but in just about getting the principles in place in the first place would have required a great deal of change, and I think what’s fascinating about this story is that you were operating at, really, a huge global level. You were trying to create industry or ecosystem-wide change and the United Nations allows, provides a platform for that but you’re therefore dealing with the heads of very large organization, country level diplomats. When you started, from you, personally, were you aware of what it would take to have these conversations and persuade people?

It’s sort of compulsion for me. I tend to find myself, or have done in my career, in positions getting people to work together resolving conflict or finding ways in which we can do better by bringing different people from different perspectives. My involvement to this, in this area, goes back some 22 years, I was at Standard Life Investments in Edinburgh early on in my career and I trained as a fund manager and qualified as a fund manager but very early on, realized that there was something more interesting happening, which was that there was this new field at the time of corporate governance emerging which describes the relationship between companies and shareholders and that just seemed to be way more interesting than the short run financial analysis that we were involved with.

It was that understanding that the opportunity to bring shareholders and companies together, which I took into the UN Project and so the most interesting principle for me is that second one, the link between the shareholder and the company as well as the longer term perspective that’s required.

In terms of the funds themselves involved, the changes that you want to be part of, are best are changes that want to emerge, this is not something I’ve created myself but rather tuned into and I gained an awareness that there was a group of leaders within the investment industry who wanted to see a change. I should say this change has not yet happened. Though it’s ten year anniversary has just come and gone, the PRI represents a huge potential for change, which is still, I think, largely unrealized.

So, it requires more effort and more momentum and impetus. But at that time, yeah, there were group of leaders that were heads of fund management companies and pension funds. Particularly, the pension funds, there was an understanding that the money of the fund wasn’t being managed consistently in the interest of the beneficiaries, the people who were saving through the pension fund and that needed to change and we described these changes in 2004 and 2005, launched the principles in 2006 and then we had a financial crisis a year later. At that point, I thought, “Well, we’re going to lose this.” It’s people who will retreat to short-term money, which is what you would expect in a financial crisis and the project will be lost. So, very happily with the support of the BT Pension Scheme which owns Hermes and Hermes Investment Management, we went on a bit of a media tour and explained that the companies that had failed, the banks that had failed, had owners and they were the pension funds and the pension fund beneficiaries and we needed better stewardship so that this sort of thing was less likely to happen in the future. The UK government picked up the language we were using. We got the Stewardship Code here in the UK, which has been copied now in several markets around the world including recently, in Japan, Malaysia, and elsewhere. We found that we managed to regenerate some momentum and, indeed, it’s continued to stay. So a lot of interest at the moment.

So that bit there where it’s about regenerating that momentum. I think it’s fascinating. So you say that UK government was supportive about generating this Stewardship Code. What happened from there that the countries picked up? Was it spontaneous on their side or was there…?

It manifested in different places, in different ways. So, the most recent one we’ll take as an example, in Japan. So the Japanese economy has stagnated over many years or decades, as you well know. Prime Minister Abe and his Abenomics program in Japan has decided if you can get the shareholders of Japanese companies more interested and involved in what countries are doing, that should be a benefit to the Japanese economy. In particular, there’s a lot of cash on balance sheets, there’s a poor level of diversity at Board level and so on. If something could be done about that then that would be to the benefit of economy, as I said. The Japanese shareholders in Japanese companies tend to be quite passive by tradition.

So this new Stewardship Code was introduced last year by the Japanese government and the regulators so I think it’s formally attached to the Stock Exchange, and about 170 funds and fund managers signed up on its launch and still yet to implement this fully. But the government pension funds in Japan has done some amazing things already. They’ve recruited people this is the biggest pension fund in the world with 1.3 trillion dollars and the Japanese pension fund has made it very clear to fund managers that they expect them to be good owners of companies on their behalf and they even, most recently, wrote to the larger companies in Japan and asked them what they thought of the fund managers as to whether they were doing a good job in interacting with those companies, which is really a brave thing to do, I think.

So, what’s the response to that? Do we know?

We don’t know yet. That was just in the last few weeks. I saw the report. I mean, they came to the unsurprising conclusion that they could be better owners than they are being and that the fund managers need to do more but it’s a good example of a direct link by government and regulator in Japan being made between the quality of ownership of companies within their economy and the quality of the companies themselves and the extent of which they’re then able to contribute to the economy. There are big things to fix in Japan. Only 3% of Board directors in Japan are women. It’s the lowest of any developed economy and there, you see huge potential as well and their drive to do this is huge. The Ministry of Economy in Japan is developing a program trying to get more women into the workplace because, of course, that’s a huge untapped potential for the economy.

And I have a question which was around the fact that you put the principles in place, or been part of putting the principles in place. You’ve established this part of Hermes, which does the stewardship and services the advisors, the institutional investors firms. And that’s a nice piece of creation, creating the structure and my question was going to have been, is just running it out now going to be rather the less exciting? But it sounds to me, from what you’re saying is that the hard work is still yet to be done.

I think so. Well, I don’t run Hermes EOS day to day anymore. I’m Chair now and I have a new role, which is to look at the dysfunctionality of the systems. So the kind of things we’re talking about. So, Hermes EOS, I founded 11 years ago to address the fact of the market failure, which is that the intermediaries, the fund managers who sit between the pension funds and the companies they own, those fund managers, by and large, don’t do much engagement. They don’t behave as good owners in the companies; they simply transact. That’s the market failure and so we created Hermes EOS to address by providing a group of pension funds with a service which would represent them in discussion with the companies that they own.

But, what about the failure itself? That is a much more important issue because if we could properly recognize the interdependence of shareholders and companies and the interconnectedness and maximize the value of the relationships the companies have with their stockholders, then that’s usually to our benefit because that increases the total sum of wealth. It’s very different from a transactional world view which sees a kind of zero sum gain as a finite amount of wealth and we’re just simply trying to get as much of it as possible for ourselves and that is a very poor way of looking at investments. So that’s the shift.

So, my new job within Hermes is to address that market failure to work with other fund management companies, even our competitor with our clients, with academics and opinion formers to try to come up a new way at looking at the investment world, which is less transactional and more relational, recognizes that interdependence and interconnectedness. Because, increasingly, in conversations I’m having with leaders of the fund management companies and pension funds, I’m finding people leading these firms who know that the way they’re investing is wrong in some respect that they know what the right thing is to do but they find that they can’t do that and they’re kind of forced to behave the way they’re forced to at the moment because the way in which the jobs are understood.

So, for example, we all know that we need a carbon tax, a carbon price of some kind. Probably internationally agreed or at least enforced locally and that, then, if it came in, that sort of regulation would lead to a reduction in the carbon exposure of our pension funds which, in the long run, would be very much the right way to invest as regulation increases and so on. But we just kind of accept the situation and we’re not doing anything about it.

We’re investing in a way which is contrary to the interests of society and the environment and the economy in the longer run but we’re kind of forced to do that. But, what if these big shareholders, pension funds, and fund management companies got together and lobbied on the regulation itself? We could change the policy environment to make our success certain, if you like, and investing in the right way and that’s the kind of thing that I’m working on at the moment.

What sort of triggers do you think are required to make that happen? I mean, is it just a continual round of conversations and persuasion that over time, people will change their mindsets or are there more strategic things that you can do?

That’s what I did in relation to stewardship and admittedly it took 11 years to get where we are and maybe we need to move a bit more quickly. But, I’m finding that this is a change that seems to want to emerge, to put it that way, and when I’m talking to the leaders of some very large fund management companies now, they are sensing that they need to behave in a different way and so they understand need for change but they don’t know of the language or tools necessary to implement and that’s, perhaps, what I can provide.

So, it is a series of conversations with largest funds and fund managers and to get them to understand that they can change the policy environment and that’s to their benefit and to the benefit of their customers. It’s a bit like there’s a concept which grew up around the development of responsible investment called the Universal Owner Hypothesis, which sounds kind of grand, and what that means is that if you’re a very large pension fund, you invest in, usually, in every company, every listed company in a particular market. So, if you were a very big pension fund investing in the UK, you’re likely to have a shareholding in most of the companies in the AllShare Index so, 800 or so companies. It that’ll be true for most markets. Most big pension funds invest in thousands of companies so they have, in a real sense, a stake in the entire economy. If you invest in every company listed in the economy, then you have a stake in the economy itself and it’s entirely rational then that you should be interested not just in how those companies interact but also how the economy itself is functioning and you have a legitimate reason, then, to be involved in the development of policy around that economy.

But, institutional investors don’t behave that way. They behave as if they’re investing in single companies and they don’t think about how those companies interact. So, one company might be polluting and that pollution might be going into a river and the other company might be a farming company down the river and you’re happy with the company polluting if you’re a cynical investor because that company is externalizing costs which is not them picking up. But of course, you pick up the costs elsewhere in the portfolio and that’s true of carbon emissions and climate change.

So, we need to do something about these things and I would suggest that and this is what I’m pursuing in the conversations with the leaders of these firms is that large investors have a legitimate interest in getting involved in a policy debate around the system itself, the economy itself and the way in which they invest and if they can change that so they can invest the way they kind of know they need to, then that’s to the benefit of the economy and society and the environment and then why would we do that?

I mean, there’s a is there a role for government here? Voluntary change is presumably much more enduring and sustainable so that sort of fits with the concept in any case but do you see a possibility for various different political aspects of greater regulation, forcing this to happen?

I think there is a role for government but working with the investors so that so, governments are increasingly not very good at policy and regulation. They’re captured by various special interests and so on but if we had representatives of long-term people for long-term stake in the economy itself properly involved in the policy debate, I think that would lead to a better outcome.

So, one of the real defining experiences for me recently was being involved in the COP 21 negotiations last year in Paris in December, but also the business and investment summits earlier in the year, and some in New York. And what I learned there was that companies and shareholders were kind of aligned. They were increasingly realizing that they wanted the same thing. You know, I sat beside the chief executives of two major European oil companies who were both arguing for carbon prices to be introduced and the environment ministers and policy makers didn’t want to do this because they’re very worried about introducing a new tax because that, of course, brings electoral liabilities. It’s very difficult, as a politician, to pursue additional taxes if you want to be reelected.

So, there’s something there around the power of that business investor dialogue, a vision for the future which is interconnected. People who are properly serving their organizations, as affiliated relational leaders, and I’m seeing that sort of leadership now emerging and for those people then, to be in dialogue with policy makers to get the best policy outcome, seeing this is as something where we’re working together for that rather than competing for a finance out of resources which, of course, is the traditional way of looking at these things.

Where is that shift going to come on the political side then?

I know we look at politics and despair, thinking how can we do this? But there have been some shifts and I think the COP 21 agreement is actually a pretty good one and now needs to be implemented. So, though we might be disappointed with the day-to-day machinations of the political class and we do find, amongst the policy makers themselves, a desire to talk to shareholders and to large investors and, of course, we shouldn’t forget that the City does fund quite a lot of the political process, not just in the UK, but financial services more broadly, and that connection, that funding connection could be turned into a positive thing, I think.

There’s also quite a lot of negative lobbying that goes on, of course, and one of the things that we work on at Hermes is trying to persuade companies to stop lobbying, to reduce the rate of regulatory burden whilst, at the same time saying they want it to increase. That does happen from time to time , its one of our engagements around that opinion.

Getting the left and the right hand to work in unison?

Yeah, you can imagine all sorts of malice and ill intent in some of these behaviours but I think a lot of it is just tradition. I very rarely encounter people who genuinely are out to do the wrong thing and misbehave but it’s more just that they come to understand their jobs as being in a particular way, it’s linked to corporate culture and culture within investing organizations, and many people that came into investment in the 80s and 90s came in to make money for themselves. That’s what they expected to do and the investment world was set up that way and that needs to shift and I think the millennials now coming into investment management want something else and I think we can build on that.

An illustrated guide for institutional investors.

I think that’s a really interesting insight. I mean, you say that it’s taken you 10 years to have got to where you are now. I’m picking up a sense of frustration that you haven’t moved things along further but, in fact, this is a supertanker that is not going to pivot quickly on its axis, is it? It’s a huge industry, global industry with lots of vested interest that has a long history to it as well. So, trying to change anything is inevitably going to be gradual.

Well, it is and the things we could do I don’t want to get too technical about it but, looking at the way we value companies with an investment. So, the current evaluation approach looks at the present value of future cashflows through the dividends of the company and you discount them into the future so you put a lower value on them the further out they are and that tends to lead to a short-term perspective on the companies and themselves.

So, that approach is what’s used by most investment managers to analyze company shares and is the currently dominant evaluation approach. The value of the firm is the assumed cashflows and you adjust other discount added in the future.

But what if we valued companies differently? Say we valued them in a more dynamic way based on their relationships. So you can say that the change and the value of the firm would be linked to the change and the quality of the relationships the company had with its stakeholders and the employees and the suppliers and the customers and the shareholders and so on. That would lead them into a different way of seeing companies and a different way of interacting with them. So, there are things like that where I think we could do and offer to the City as a different approach, which might then sit quite well with the change in–

But are there metrics to go with that that are quantifiable?

Yes. Well, I think so and there’s quite a lot in economics and investment which looks quantifiable which actually is quite causative. The equations that appear in economics are often not really very mathematical.

Fair point.

They add up all sorts of things then come up with something that looks firm and quantifiable. It probably isn’t. So, I’m sure we could produce a nice economic version. It might be in front of me actually relating to dynamic evaluation by relationship aspects. So I’m working on a model for this at the moment which I’m due to present a conference in.

I’m aware of time. But, just sort of focusing back on you as an individual there. What particular skills have you become aware of that you use that are powerful in engendering this change that you’ve created among institutional investors?

Well, as I mentioned earlier, it’s almost a compulsion really to bring people together and to resolve conflict and so on. I think that that has motivated me to try to solve these issues and problems. The other is trust. I tend to engender trust in people and I think that’s something which has been very helpful to me in my career. So that combination of wanting to help to bring people together, resolve conflicts, and to do so in a way which engenders trust has led to this success I’ve had, I think, and has enabled me, then, to do things which, perhaps, are unusual within the investment world.

So, to get people working more together, recognizing they’re interconnected, it was really that the history of the development of engagement and the development of the engagement service within Hermes EOS and knowing that sustainability implies profitability. People think about sustainability within an investment and business is somehow altruism or tree hugging giving up something in order to do good.

But actually, a sustainable company is a profitable company. That’s the point. It implies profitability but it does mean that the generation of profits for shareholders are not confused with corporate purpose. It’s a consequence of good corporate purpose and there’s the sorts of insights that I’m bringing into investment from the business world and encouraging the business world itself. So, I think it’s also the desire to serve, perhaps, and to help the system itself. I’ve never really been concerned with making money for myself or advancing my own position.

Well, that’s fascinating. Brilliant. Sort of furthering that and this is one of my sort of standard closing questions. Do you have any daily rituals that you enact to help you manage when you’re obviously incredibly busy? Are there any things that you do on a regular basis that…?

Yeah, so I’ve always looked after myself in terms of exercise. So, I exercise most days. So, swimming twice a week, weight training twice a week, and I’ve recently started yoga, which I find very helpful. I guess I’m getting older now. It’s my 50th birthday looming on the 1st of August so I’ve decided that flexibility and yoga might be a helpful thing. But, about two years ago, I started meditating as well, which has been helpful too, I think, just in dealing with the day-to-day pressures. I’ve traveled a huge amount. I’m away out of London more than half the time and in order to deal with the very busy schedule and lots and lots of meetings, I find meditations is very helpful.

That’s fascinating. Thank you. Finally, what advice would you give your 25-year-old self now?

“Don’t be afraid”, I think. A lot of us are conditioned in our lives by fear and that can hold us back and I think, at various points, I’ve been concerned that if I raise something or presented the world or how it should be in a particular way then that might be viewed negatively by those that I was working with and I perhaps could have pushed a bit harder and faster if I had known that. So, yes, let go of the fear and that way, you can realize what’s possible.

Superb. Colin, thank you very much.

You’re welcome.

I think it’s an amazing area you’re engaged with and hugely uplifting because, often, the stories we get out of financial services world and institutional investors, they’re not that uplifting and I think, because it interacts with the wider world is really exciting. So thank you very much for the conversation. I’ve really enjoyed it and I’m sure our listeners have too.

Roddy. thank you very much, it was a pleasure too.

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