On the right course
My favourite investment: tips each month from a City expert
Sunday 06 June 1999
Sometimes all you need is luck to stumble across a successful investment. Alan Torry has established himself over the years as one of the top managers in the field of new technology. Yet one of his best-ever personal investments had nothing to do with technology, more to do with where he lives and his chosen sport of golf.
"I may have an awful handicap, it's 24 actually, but I enjoy playing golf," says Mr Torry. "Living near Epsom, I decided to join my local golf club just over six years ago. This just so happened to be the RAC."
Well, we all know that after a bidding war, the members of the RAC this year accepted a takeover bid from Lex.
"I never joined for investment reasons," he says. "The club membership cost me around pounds 700 a year. When the deal eventually goes through, I'll receive around pounds 30,000 for my share in the membership, so you can imagine that I'll be buying a few drinks with that."
And sometimes even technology gurus have a long wait for an investment to pay off. Around 10 years ago, Mr Torry invested pounds 1,500 in Diomed, a private company based in Cambridge that specialises in supplying lasers for surgical operations. "I invested in the hope of making money when it went public. But early-stage ventures always take time. My investment is still languishing, but I haven't given up hope. The company has good prospects and I still believe that I will get a return," he says.
As you would expect, Mr Torry is a firm believer in investing in new technology stocks through a well-managed fund to reduce risks. "Setbacks will happen," he says.
"There will always be new technology stocks, whatever is driving the economy forward. It used to be engineering, the railways, whatever, now it's the internet. To be successful, you have to ride the next wave of technology, something a good fund manager can do. Already we are looking to the second wave of internet companies. These need to be researched before you'll find the winners.
So he numbers investment in his own funds as being among his favourite investments. "I bought into Prolific Technology at 50p a unit when it was launched. Now they stand at over pounds 15 each," he says. "I still hold the units - I'm locked in by my tax situation."
He has also invested in his new Soc Gen fund - which has gone up some 50 per cent since its launch last year.
In his chosen area of expertise, his current favourite holding is in a company called Veritas. Listed in the USA on Nasdaq, it specialises in software storage, an increasingly important function. Although not an internet stock, internet companies such as Amazon and E-Trade are a rapidly growing source of revenue, rising from 3 per cent of turnover a year ago to around 15 per cent today.
"I bought into Veritas at $40 a share when it was floated last summer" says Mr Torry.
"Today, its share price has doubled and the company is valued at over $5bn. It's currently acquiring the data storage management arm of Seagate, and when the deal is finalised, the company will be valued at over $7bn, large enough to join the S&P 100, the index of 100 largest companies.
"While no longer cheap, I plan to continue holding its shares as it will show very fast growth for some time yet."
The technology of yesterday also finds a place in Mr Torry's personal portfolio. He spent Bank Holiday weekend - when not on the golf course - getting a 3-litre 1925 Bentley ready for its MOT. "When I get it through, thanks to the last Budget, I won't have to pay any road tax. It's not really a classic car, more a tank," he says. "But I bought it for pounds 80, and it's been a labour of love. Although worth some pounds 50,000 at the peak for classic car prices, and worth around pounds 20,000 now, it's not for sale."
WHO'S WHO: ALAN TORRY
n Alan Torry, aged 51.
n Studied economics.
n Went into investment management with Provincial Insurance, which set up a unit trust management arm, Prolific.
n In 1982, Prolific Technology was launched.
n In 1997, when Prolific was acquired by Aberdeen Trust group, the Technology fund had grown to pounds 120m and was one of the best-performing unit trusts, averaging 22 per cent a year growth over the previous decade.
n Along with his colleagues that run the fund, in 1998 he joined the new investment management arm of Societe Generale that was being set up by Nicola Horlick. He now looks after pounds 100m of investments.
n Since Soc Gen Technology was launched just over a year ago, its fund size has grown from pounds 10m to pounds 30m.
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