Meet the Team - Peter Doherty
In our last meet the team article for 2022, we speak with Peter Doherty, Head of Investment Research as the year draws to a close.
What does your role entail?
As Head of Investment Research, I work closely with my team to ensure the wider Investment Committee at Arbuthnot Latham are equipped with the information required to successfully manage our investment portfolios.
Our research team consists of analysts focused on risk and portfolio analytics, macroeconomic and market research, and fund selection. My aim is to ensure everyone works harmoniously together so we can make the right decisions for our clients.
I am always looking at how we can make progress and improve efficiency, which in turn supports our decision-making process. No matter how solid an investment process is, there is always room for improvement.
What are the biggest concerns clients are facing now?
It has to be inflation, both from a spending perspective and a real return perspective. In a year with soaring inflation and negative returns in most asset classes, clients have seen large real losses in portfolios. We believe that inflation will moderate over the coming year, but consumer price levels will stay elevated. Our focus is catching up on real returns to bring our clients’ portfolios back to positive territory after the effects of inflation.
Inflation appears to be abating. What are your thoughts?
The market shifts we are witnessing suggests this is the case. My team continue to gather evidence that supports this, and we continue to evaluate challenges we may encounter in 2023.
The difficulty is not really whether inflation will come down, but where it will settle in the long run as the forces driving global inflation have changed significantly relative to the last 10 years. They may end up being more structural in nature. The negotiating power of workers for example, driven by a shrinking global workforce and de-globalisation, are very different to the last 20 years. We have been used to globalisation driving costs down through the utilisation of an expanding workforce led by Eastern Europe and China. These factors are reversing. On a cyclical basis, we will likely have to get used to high inflation volatility in the global economy. Many of the imbalances we are currently facing are yet to be resolved, such as those relating to the energy and commodity market, a result of underinvestment in supply in the last decade.
Are there any personal or professional highlights for you this year?
I ran the Lake Garda Marathon last April in under four hours, beating the time I took when I ran my first marathon in London, so I was thrilled to achieve this milestone. First marathons are always unpredictable – will your legs hold up to the end of the race? The second marathon was much more enjoyable — it is all about your will power that drives you forward. In both marathons, my legs went dead halfway through, but I learned to zone out and just kept putting one leg in front of the other: perseverance in the face of uncertainty. This links closely to my professional highlights for this year – where market performance which has been grinding lower for core long-only assets with huge changes to fundamentals requiring extensive research. We were fortunate with our 2021 research helping position portfolios relatively well for 2022. Bear markets are about perseverance — continue to do the research and the answers will reveal themselves.
What are you most looking forward to over the Christmas holidays?
There is always so much magic with young children driving Christmas. I have a five-year-old daughter, so this time of year is very special. I am currently in a state of high alert at home; keeping gifts hidden until the night before Christmas is a logistical nightmare every parent can relate to. But all worthwhile to share in her wonder on Christmas morning.
Has inflation peaked?
As we gather further evidence inflation is softening, we continue to evaluate what challenges we may see in 2023.
Autumn Statement: Investor’s analysis
Sunak’s government is attempting to strike a balance of not overly tightening into a recession while keeping policies in place that gives the market comfort that the UK’s debt to GDP ratio will come down in future years.