By Lionel Laurent
LONDON (Reuters) - At a time when regulators are cracking down on the way fund managers pay for company visits to help work out investment strategies, investor Jeremy Lang has a simple answer: don't bother meeting management at all.
For the past 15 years, Lang - a founding partner of asset manager Ardevora - has made a point of never meeting company executives, a rule he describes as totally against the norm in an investment community that prizes corporate access as a way to get better or exclusive insight into management thinking.
According to a 2014 fund-manager survey by Extel, "meetings with companies" is the second-most desirable research service provided by brokers, narrowly behind "trade ideas".
However, seeking to promote a level playing field among investors, Britain's Financial Conduct Authority last year finalised new rules that curbed fund managers' ability to pay for broker-arranged visits using client commissions.
Lang believes that, rather than boosting the bottom line, meeting management is bad for returns. An avid follower of cognitive psychology, Lang says company CEOs fit the profile of charming communicators whose job is to convince and cajole; they are more likely than not to cloud or skew investors' judgment.
"The types of people that rise to the top are inveterate risk-takers...They all tend to be extremely good salespeople," Lang told Reuters, at his offices near St. Paul's Cathedral in London's financial district.
"If you view it like that there's absolutely no point in trying to meet them."
There are some exceptions: Lang makes a point of reading written CEO statements, arguing that it allows him to analyse their "choice of phrase" without fear of influence.
And last year, ahead of the spin-off of Lloyds Banking Group (L:LLOY) unit TSB (L:TSB), Lang decided to break his own rule and meet with the bank's management. It was the first time he had arranged a company visit in 15 years, he said, explaining that there were just a few specific questions he had to ask.
"I don't trust banks ... We got a couple of questions in and then we ran," he said. "It was my 15-year vaccination."
Ardevora, which manages 1.3 billion pounds ($2 billion) in assets, said that for the first three months of 2015 its UK equity fund was up 11.2 percent and its global equity fund was up 8.5 percent. The UK FTSE 100 index rose 3 percent and the MSCI World index rose 1.8 percent in the same period.
Among the companies Lang says he has shunned is UK retailer Tesco (L:TSCO) as well as names in the oil-and-gas sector, saying management showed signs of over-selling empire-building.
"(Oil companies) went through the language of hope. You can clearly see evidence they over-hyped those hopes," he said.