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Conkers’ Corner - Edward Roskill interview

Conkers’ Corner - Edward Roskill interview

02 January 2017

Here is piworld’s second collaboration with Share Talk’s Conkers’ Corner. Peter Higgins (@conkers3) interviews Edward Roskill, (@RoskillEdward) lawyer, corporate financier, ex JP Morgan Investment Banker, co-founder of Strata Partners and private investor.

Edward began investing when he was around 16 years of age with put and call options – as Edward puts it “with a very small amount, you could make your money do something amazing, or lose it completely!” For his 18th birthday, Edward received £500 worth of shares in two companies, this was his first introduction into investing in shares.

Edward went to Cambridge where he attained an MA in Law. He qualified as a lawyer in 1994 with international law firm, Freshfields Bruckhaus Deringer, practising corporate and commercial law, followed by merger and acquisition work. Edward then made the switch from the legal side to investment banking, corporate finance, with Robert Fleming and JP Morgan. As an investment banker, he was involved in a variety of transactions including public and private company acquisitions and disposals, private placements, IPOs and follow-on equity offerings.

Edward gained a first hand view of how deals were put together from his time at Fleming and JP Morgan and then in 2002 he co-founded his own advisory firm Strata Partners advising tech companies on mergers and acquisitions. Edward focuses, in particular, on IT services, business process outsourcing and software. He has acted for The Capita Group plc on its US$160m public offer for IBS OpenSystems plc (2008); for IBS AB on its US$100m sale and IPO of IBS OpenSystems plc; for Marlin Equity Partners on its US$32m million public offer for Chelford Group Plc; and for SunGard Data Systems on its US$242m successful public offer for Guardian iT plc (2002).

Fourteen years on, Edward remains a partner at Strata Partners and he spends about a third of his time working with specific clients and transactions. He spends two-thirds of his time managing his family’s investments, where he focuses on small-cap and microcap AIM-listed investments.

Edward’s investment strategy is one of researching smaller companies that are less well examined and less looked at by fund managers, as that is where he finds “little gems” that are sensibly valued. Even then Edward is a firm advocate of visiting the company, meeting management and really getting to know the business before he makes any kind of investment. This enables him to reduce his risks and increase his conviction towards his investment.

Edward stresses that one of his most important tenets of investing is, “don’t lose money”. The experienced and astute Edward states, “even now I find I have much to learn”.

How he got started in trading [00:00:00]

On his educational and professional background [00:04:00]

“The stock price is always wrong… only right at one point in time, when a business is sold.” [00:07:13]

What is the ethos of Strata Partners? [00:09:53]

“Companies with less than £50m market capitalisations tend to be less well examined by fund managers … you can find little gems.” [13:58:00]

“We all fall into the trap of looking at the price too closely … often it’s just unhelpful.” [00:19:00]

“Just because you are investing in a large cap … you may have a false sense of security” [00:20:33]

An example: Hunting Group. [00:21:35]

On the importance of compounding and consistency. [00:24:55]

His sector preferences. [00:28:42]

He doesn’t like these two sectors. [00:28:45]

The most significant lesson he tries never to forget [00:36:30]

What does he look for in meeting with company management teams? [00:38:30]

On the importance of avoiding liars. [00:41:20]

On management greed. [00:41:48]

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