Dean, who was born in 1970, studied history at Oxford, before starting her career at GT Asset Management and then HSBC. She moved to Cazenove in 2002 to run its UK Opportunities Fund, then left the firm in 2014 (after it was taken over by Schroders) to join Sanditon Investment Management. She has run the TM Sanditon UK Fund since 2015.
What is her strategy?
Dean’s starting point is companies’ varying sensitivity to the economic backdrop, a function of their sector, debt and fixed costs. She skews her fund’s money towards the most promising bets at a particular point in the cycle – emphasising industrials and consumer cyclicals during an upswing, for instance.
Did this work?
Between 2002 and 2014, Dean’s UK Opportunities fund returned a total of 312% – an annual return of 13.1%. The FTSE-All Share only returning 185% during the same period (9.5% a year). By the time she left Cazenove, she was managing £4bn in assets.
What are her biggest successes?
In 2009, Dean invested in Howden Joinery, a struggling engineering firm. Gloomy investors appeared to be assuming that the company – and the wider economy – would go under. Dean was more optimistic on both counts, and she began buying Howden when the share price was only around 9p.
Over the next five years, the shares soared to well over £3.
What lessons are there for investors?
Most investors take a bottom-up approach to investing, focusing on individual companies. However, Dean’s success show that it is possible to be successful with a more top-down approach, assessing the wider economy and then attempting to predict which sectors, and consequently which firms, will thrive.
At the very least, it’s a good idea to take into account a firm’s level of operational gearing when investing. Such companies will benefit relatively more from increased growth (and be hurt more by a downturn in sales) than other firms.