An audience with Mark Mobius: The 81-year-old investor’s second act

But, instead of sitting by the fire with a good book, the renowned fund manager quit the S&P500 company in January, launched his own asset management boutique and has poached two of Franklin Templeton’s most well-known and respected portfolio managers in the process.

“Put it this way — I don’t think they [Franklin Templeton] were happy about it,” says Mobius during an hour-long interview from his firm’s new base in London’s Victoria. “I think it would have been nicer for Franklin if I had retired and just faded away. But that’s not my style — I left, set up on my own and took two people with me.”

The two portfolio managers — Carlos Hardenberg and Greg Konieczny — were officially named at a launch party for Mobius Capital Partners in the City on Wednesday. The pair, who join as partners, left Franklin Templeton in January alongside Mobius but a “non-compete” agreement prevented them from announcing their move until the start of May.

Mobius, a German citizen who was born in America but now resides predominantly in Singapore, was not restricted in the same way. “I never had an employment contract with Franklin Templeton and so a non-compete was out of the question,” he says.

“All I had was a gentlemen’s agreement with Charlie Johnson, who was the chairman of the company when I was hired. In all my time with Franklin I never talked about my salary, never talked about compensation. Each year they just gave me what they thought I was worth. It was a very good relationship in that sense.”

So did he leave on good terms? “Well, it depends what you mean by good terms,” he says. “Charlie Johnson was the guy I was really close to and we are still good friends but he has retired. Jenny Johnson, who is now president, we still know each other. But what can I say? They were not overjoyed to see me go.”

Mobius admits he will miss the infrastructure available to him at the listed investment powerhouse. Mobius Capital Partners is housed in a co-working space just a few minutes walk from Victoria station. He says the company will hire nine portfolio managers and three or four analysts. All other functions will be outsourced.

“You realise how much you depended on all those resources,” says Mobius, who launched one of the world’s first emerging market funds. “A good example is travel. When I was at Franklin I had my own plane. Now I get commercial flights and I have learnt how the other half lives.

“I miss the plane, but I really enjoy being at major airports because of the lounge. Also when you get on a commercial aeroplane you are served. On a private plane you have to do it all yourself.”

It is hard to muster sympathy and so we move onto wider issues. Mobius, who predicted the start of the bull market in 2009, believes the US market is set for a 30% correction that would essentially wipe out the gains of the last two years.

“All the indicators” point to a large fall in the S&P500 and the Dow Jones Industrial Average, he says. “I can see a 30% drop. When consumer confidence is at an all time high, as it is in the US, that is not a good sign. The market looks to me to be waiting for a trigger that will cause it to tumble. You can’t predict what that event might be — perhaps a natural disaster.”

Mobius believes it is going to become a “stock-pickers market” but concedes that if the policies enacted by US president Donald Trump to stimulate the economy are successful, including his tax reforms, then markets will continue their rise in the short term.

On Trump, he adds: “I love the freshness he brings to the office. He says what he thinks, he has tried to go after the bureaucracy and the Washington crowd. Of course, I don’t agree with what he has to say on immigration, my parents were immigrants, but a lot of what he says makes sense. I enjoy reading what he is doing on Twitter. But you have to see it more as entertainment than policy.”

We circle back to his new venture. The London-based business, which is starting with seed money from the three partners plus family and friends, will invest in 20 to 30 emerging market stocks but with a bent towards companies where Mobius thinks he can improve environmental, social or governance standards.

“We are going to have to walk a very fine line and make sure we buy companies that need improvement but are not beyond redemption,” he says.

The son of a German baker is confident in his ability to pull in new investors. “Within two years if we have don’t have a billion dollars that won’t be a good sign. We should be able to move up pretty quickly. In the first year I expect to have $500m.”

Our meeting comes to a close but before we part I feel compelled to ask about the all-important signature white suit.

“I like colour, I like innovation,” he says. “When I first wore the white suit people would say ‘this is different; you don’t look like a businessman’, and I thought, yes, that is impression I want to give. The suit didn’t start out as a brand but it became one. People would say: ‘Where is your white suit?  You are not wearing your white suit’, that sort of thing. But now I have a powder blue one, and so I wear that too.”

CV: Mark Mobius

Born
1936

Education
Bachelor’s and master’s from Boston University (social psychology, art and journalism)
1964 PhD in economics and political science, MIT

Career
1980-86 Portfolio manager and director of research, Vickers Da Costa. Opened the company’s Taiwan liaison office in 1983
1986-87 Portfolio manager and president, International Investment Trust Company, Taiwan
1987 Joins Templeton and launches Emerging Markets fund
1992 Franklin Resoures acquires Templeton
2005 Launches group’s first Bric fund
2010 Executive chairman, Templeton emerging markets group
2012 Launches first Templeton Africa fund
2013 Launches Luxembourg-registered Sicav for sharia investors
2018 Departs from Franklin Templeton and sets up Mobius Capital Partners

Courtesy fnlondon