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Asset manager in portrait: The Guinness principle
Edward Guinness could have made it easy for himself. As a distant scion of the famous brewery dynasty, the world was practically his oyster from birth. But the current head of the independent asset manager Guinness Global Investors deliberately chose a different path: „I actually never wanted to get into the fund business - because that was exactly what my father did“, recalls the now 50-year-old.
Instead, he studied engineering and started his career in investment banking at HSBC. The working hours were brutal, he remembers: „Our managing director expected us to be there at 7 a.m. Nobody left before 9 p.m., and we also had to work two or three weekends a month.“
In 2002, he moved to New York to work at the hedge fund Tiedemann - far away from his father's influence. It was not until 2006, when his father Tim Guinness sought support in setting up a sustainable energy fund, that he returned. „We were surprised to discover that we could work well together“, he smiles today.
From London to the world
This return marked the beginning of a careful evolution of the family business. With his involvement, the company opened up internationally, built up new business areas and modernized its structures. Today, Guinness Global Investors manages assets for clients from all over the world, with a focus on sustainable energy, global equities and venture capital.
The company now employs 83 people worldwide. With assets under management of 10 billion euros, his company is big enough to be relevant, but still small enough to be able to act flexibly and independently. A position that Guinness defends purposefully.
„In my opinion, the big asset managers make two crucial mistakes“, he analyzes. „They become too complex and let their fixed costs get out of control.“ Instead of offering a dozen different global equity strategies like the big players in the industry, he deliberately limits himself to a few, clearly defined approaches. „If you have too many variants of a product, you lose differentiation.“
“Commission models create the wrong incentives”
He also consciously takes a different approach to pay than his competitors: „We compensate our sales and marketing team entirely discretionarily, without rigid formulas“, he explains. „Fixed commission models create the wrong incentives. We want quality instead of blind growth.“ A philosophy that runs through all areas of the company.
He waves off takeovers, the favorite growth path of many competitors: „M&A is incredibly difficult in the fund industry. You bring people with egos and often completely different approaches together. That rarely works.“ Instead, he relies on organic growth and clear structures.
Father and son definitely agree on one thing: „A stock exchange listing would be the biggest mistake.“ Edward Guinness says this sentence with a conviction that leaves no room for doubt. While many independent asset managers dream of making big money on the stock market, the head of Guinness Global Investors is deliberately taking a different path: „You need a clear vision and decision-making power instead of endless committee meetings.“
Over the years, the asset manager has received a number of trophies, which are on display in the conference room © DAS INVESTMENT
Edward Guinness on active ETFs
Guinness is also going its own way with the biggest industry trend, the rise of active ETFs. In the USA, it already offers five ETFs, and in Germany Europe it works with Hanetf. The segment is exciting, but he clearly differentiates between different ETF approaches. „The big US companies are doing it very cleverly with their 'Research Enhanced' products“, he analyzes. „It's a kind of 'Passive Plus' with slight overweighting compared to the index - but at passive prices. For us, however, that's not the right way. We rely on real active strategies.“
However, he warns against short-term hype: „Many thematic ETFs can collect assets quickly, but lose them just as quickly. We, on the other hand, rely on long-term strategies.“ This long-term perspective also shapes product development. The European income strategy, for example, was expanded from 10 to 60 million euros within a year, and now the 100 million mark is being targeted. Geographically, the business focuses on Japan and Canada. A 350 million dollar venture capital business rounds off the portfolio.
Only 45 percent of investors still come from Great Britain, the rest are spread across Europe, Asia and America. Germany is the second most important market after Great Britain: "There is a very analytical, structured approach to investments here," he explains. „This fits perfectly with our systematic investment process. German investors value our clearly defined processes and comprehensible decision-making processes.“
1.200% Rendite in 20 Jahren?
Business is heading in a good direction, but one has to be very careful about which inflows of funds one accepts, stresses Guinness. His largest investor makes 14 percent of assets, only one is still above 10 percent. „This diversification is important. Big investors can pull out on a whim, it doesn't even have to have anything to do with you. You have to be prepared for that.“
Delegating instead of micromanaging
He may have inherited his caution from his father. However, his management style is very different: While the senior, as a classic „micromanager“, wants to control every detail, Edward Guinness relies on delegation and clear responsibilities.
„When we were still ten people, everyone could do everything“, he remembers of his beginnings in 2006. „With our current size, you need different systems. You can only build a really big company if you give the right people responsibility.“
His training helps him in this: As a trained engineer, the Cambridge graduate brings an analytical eye. He compares his management philosophy to that of a cricket selector: „80 to 90 percent of decisions are based on getting the team's opinion. Only with 10 to 20 percent do you have to push through your own ideas.“
It doesn't work without people
Guinness sees the biggest challenges in the increasing regulatory pressure and increasing digitization. „The regulatory burden for global fund managers is enormous“, he complains. „Every country interprets the rules differently - the French differently than the Germans, the Italians differently than the Americans.“
Digitization is also fundamentally changing business. „Thanks to ESG alone, we now have many more data points on each company that need to be processed and analyzed“, he explains. His company is investing heavily in technology to handle this flood of data. „But in the end, you still need people who recognize the patterns and draw the right conclusions.“
More than 80 employees now work for Guinness Global Investors worldwide © Guinness Global Investors
Committed to history
This mixture of tradition and modernity is also reflected in his family history. The Guinness brewery has been family-run for six generations, and his grandmother's side has a private bank in the 13th generation. „On both sides of my family there is this tradition of long-lasting companies“, he says, not without pride. His own three children – aged 16, 14 and 11 – should one day be able to continue this tradition, but without pressure. He comments with typical British humour that the eldest is currently dreaming of a career as an astronaut: „Maybe he will set up the first fund on Mars later.“
It is more important to first find the right to create structures in which future generations can gain experience in various areas of the company. He himself is not thinking of quitting any time soon: „We are building a business for generations“, he emphasizes. For him, that also means remaining active for a long time: „I have the privilege of running one of the most exciting businesses in the world, surrounded by brilliant people. Why would I want to stop?“ His father, who still works five days a week, lives this dedication.
Following the footsteps of the greats
The vision for his company is clear: „We definitely want to become a global player, not a boutique.“ The already international investor base, which stretches across four continents, helps with this. „We only have no significant investments in Latin America“, he grins.
He cites companies like Vanguard as role models: „They were also tiny in the 60s and 70s. Thirty years later, they were huge. I think we can follow a similar path.“ Not by blind imitation, however, but in his own way: cautious, analytical and with a clear focus.
