We recently had the pleasure of interviewing John Lambert, an investment manager at London-based GAM.


MOI Global: How did you get interested in investing? Describe your path as an investor and what attracted you to your current role at GAM.

John Lambert: I first got interested in investing on a personal level during the late 1990s when market gyrations were providing the retail investor with plenty of opportunities to make, and lose, money. I certainly didn’t take it very seriously to start with – but the more I learned about investing the more I felt it was the ideal job for me – so I decided to make a slight change of direction to my career, which was in commodities at the time. It has taken a long time to really find a coherent investment style that I feel comfortable with, having worked for several years as a European sector analyst in industrial goods and services. This was followed for a while by running a small pot of hedge fund assets investing in that same sector, before moving to GAM. Here it is far broader, as I am helping to manage long-only UK and global funds with a distinct contrarian and deep value approach.

Our time horizon is multi-year, which I feel much more comfortable with than the daily pressure of the hedge fund world. It represented a huge step up, given the relatively narrow area of expertise and experience I had as a sector analyst, so the learning curve was necessarily very steep. The principal attraction of this, at the time and still today, was the opportunity to expand my investment horizons substantially and blend company-specific work with a much broader understanding of how markets and economies work and interact.

MOI: When it comes to stock selection, what are the key criteria you look for in potential investments?

Lambert: In general, we look for investments in areas that for one reason or other are seeing particularly depressed sentiment or are simply out of favor. Within this framework, we also like stocks with a particularly strong internal dynamic, meaning they are to a greater-than-normal extent in control of their own destiny. This usually leads us to recovery or turnaround situations where the company is undertaking a number of different actions to rehabilitate itself following a period of often dramatic underperformance. As a result they are often perceived as low-quality businesses. Moreover, we like to see a strong sense of change within the business, obvious examples of which would be the divisional structure of the company, the balance sheet and senior management. Unsurprisingly, these situations can offer considerable upside should the company execute the turnaround successfully. In the simplest terms you could say we look to exploit mean reversion.

MOI: How do you assess the quality and incentives of management?

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