Meet the Managers: Conan McKenzie & Lamiaa Chaabi

Conan McKenzie
Co- Portfolio Manager, Charity Funds
Lamiaa Chaabi
Co- Portfolio Manager, Charity Funds

Capital at risk. The value of investments and the income from them can fall as well as rise and are not guaranteed. Investors may not get back the amount originally invested.

Can you tell us a little about your background, and what you are passionate about?

Conan: I’m a Londoner! I grew up in South London and other than three years at university I’ve lived here all my life. Outside of work I enjoy outdoor sports: hillwalking, climbing, trail running, cycling, sailing. All of these are about spending time in the natural world. For the last five years I’ve also been a volunteer debt advisor for a debt advice charity in west London, and so I’ve had an insight into the lives of lots of people in pretty difficult situations.

Lamiaa: I was born and raised in Morocco. I moved to London for university, and I haven’t left since. Now married with two kids, London has really become my second home. Outside of work (and running after the kids), I love sports. I used to run, play football and swim competitively in high school and university. I am now in the midst of preparing for a mini triathlon in Morocco which I’ll do with my dad.

I am also passionate about education and EdTech, particularly equality and accessibility of education. After I had my first child, I was disappointed in the cost and inaccessibility of early years childcare / education, so during parental leave, in between my newborn’s naps, I built a front-end search tool that centralises information of home carers in London to at least address the issue of transparency! 

How do you integrate this passion into investment decisions?

Conan: One of the difficult things about the transition to a truly sustainable economy is that it’s going to need an enormous amount of capital. But for us as investors, that means we have an amazing opportunity to contribute to it! In fact, the green transition isn’t going to happen without trillions of dollars of capital being invested in sustainable infrastructure, so it’s vital that we play our part in contributing. Sometimes this is about what you don’t buy (staying away from thermal coal companies for example). But much more exciting than that is what you do buy. As a team we’ve invested for nine years in solar energy infrastructure, helping to build out solar generation capacity around the UK. More recently we’ve also invested in wind generation, energy efficiency infrastructure and battery storage assets. These have generated good financial returns for our clients, but also made a vital contribution towards building a greener economy. On the social side I’ve also led investments into specialist social housing, both for disabled people and for people at risk of homelessness. This provides specially adapted, low cost and long-term accommodation to people who really need it. Again, the financial returns have been good, but equally important is that we’re using the power of capital to make a real difference in people’s lives.

Lamiaa: Alongside putting our clients’ money to work, we’re also responsible for educating our clients and bringing them along the investment journey from start to finish. I particularly enjoy presenting to our clients as it represents a great opportunity to exchange ideas and views - the teaching is two way. I recall once getting challenged on the sustainability of gold and its suitability in an ESG portfolio. The challenge led to an interesting conversation where ultimately, we landed on the point that Gold, being non-perishable and therefore recyclable, is far less carbon intensive than the other bulk metals; and, in fact, over a 9-year horizon, gold emits much less carbon per annum than an equivalent investment in US equity markets. Thanks to this discussion, I came away with more ideas on how to monitor and integrate ESG considerations into portfolio construction.

Risk: The environmental, social and governance (“ESG”) considerations discussed herein may affect an investment team’s decision to invest in certain companies or industries from time to time. Results may differ from portfolios that do not apply similar ESG considerations to their investment process.

What has been the biggest challenge you’ve faced in your investment career?

Conan: COVID was an enormous one. I was living in a houseboat at the time, and the internet cable was threaded over a wall, through the branches of a pear tree, down the trunk and through a letter box. One day I accidentally sliced it while trying to cut back some ivy. The consequent loss of internet access was a pretty big challenge while trying to manage portfolios through the most volatile environment in a decade!

Lamiaa: The pandemic was the biggest challenge for me too. Just before it hit, I contracted a different virus that resulted in me getting Guillain Barre Syndrome, an acute disorder of the peripheral nerves that causes weakness and paralysis of the limbs. I had to be admitted into the ICU and hospitalised for some time, after which I had to undergo physio. Right when I was ready to get back to work, the UK government advised that everyone works from home. It was definitely a challenge, especially with the markets being so volatile and the team working remotely. All in all, the Covid pandemic was not only just challenging, but also incredibly humbling and inspirational from an investment and humanity perspective.

What excites you most about investing for Charities and Endowments?

Conan: I love that charities and endowments can be truly long term in their investment decisions. One of my old colleagues is an investment committee member at a very old Oxford college, and he says their endowment has good centuries and bad centuries. At the same time, we know a lot of our charity clients use the income from their investments to pay wages and other operating expenses. So, we know when we’re making decisions that people’s jobs are potentially dependent on the outcome. That’s a pretty good incentive to try to get it right.

Risk: There is no guarantee that a positive investment outcome will be achieved.

Lamiaa: Ultimately, it excites me that I’m generating more capital and steady income for charities and endowments so that they can fund and advance their charitable causes and aims. What’s more, we’re doing this in a sustainable and impactful way by investing in areas that are most aligned with the entities’ missions and investment values, like social housing, food security, biodiversity and more. The latter themes are as ever topical at the moment, so it is very exciting that we’re able to invest in them while staying within the guidelines of our clients. Even more exciting is the fact the charities and endowments clients have an appreciation for long term investing given the long-term nature of their goals. This gives us room to invest in slower moving pockets of the market that realise strong returns over a longer time horizon, like companies that are innovating to solve some of the ongoing challenges we face.