An Afternoon in the City: Luncheon with Dan Caps
A North London Encounter
Meeting Dan Caps, investment manager at Evelyn Partners, was indeed a delightful midday pause. We gathered at the charming venue of 1 Lombard Street for the premiere edition of the ETF Lunch Hour. Our shared North London roots made the conversation all the more engaging, and as Brits do, we indulged in a light fish lunch. Dan relished his sea bass while I, casting tradition aside despite it being Tuesday, savoured the comforting staple of fish and chips. Naturally, the tartar sauce was exceptional.
The Allure of Passive Investments
Dan Caps’ fascination with finance was deeply rooted in his upbringing, with his father being an IFA operating from their North London abode. This exposure inspired him to commence his journey as a financial planner, appreciating the early lessons even as he sought a path better aligned with his interests. His career found new dimensions at Moore Stephens’ wealth management division. Here, a passive investment strategy illuminated his true passion, leading him to oversee passive investment offerings for a decade.
Following The Investment Road
Moore Stephens was eventually acquired by Tilney. The acquisition led to Tilney and Smith & Williamson’s merger in 2020, amassing assets over £20 billion in management. As the dust settled, Dan eagerly dove into managing passive and factor-based strategies, notably the Evelyn Partners Index MPS Range. Collaborating with his colleagues in the Passive Fund Research Team, he navigated the intricacies of these offerings, which included £4 billion in passive funds and ETFs, and £3 billion in MPS offerings. “Passive funds are all I do,” remarked Dan.
Reflections on Active Management
Delving into the past, Dan recounted investing in active funds in the early 2000s, like the New Star Technology Fund and JP Morgan Natural Resources Fund. Despite their laudable past performance, these investments tanked, providing him an invaluable lesson: the danger of chasing past performance. As discussions around active versus passive investing continue, Dan advised, "Ignore the distractions." He emphasised the importance of "time in the market, not timing the market," amidst the market’s sheer intensity.
Historical Parallels and Investment Wisdom
Dan reflected on the market, drawing parallels from historical events. For instance, if an investor held onto the S&P 500 pre-dot-com crash in 2000, breaking even would take over 11 years, including dividends and before taxes. He sternly warned against relying on single assets, pointing out the risks of complacency and the necessity of diversification and rebalancing, lest investors ‘sleepwalk into a crash’.
The Arsenal Connection
A shared love for Arsenal was inevitably broached as I relished my crème brûlée. “Anyone who knows me for five minutes knows I love Arsenal,” Dan declared. We delved into the club’s standing in the Premier League, noting the impact of injuries and discipline issues. Yet, optimism abounds for Arsenal’s season—once the squad is whole again, much success is anticipated.
| Challenges | Impact | Outlook |
|---|---|---|
| Player Injuries | Key matches missed | A promising return expected |
| Disciplinary Issues | Red cards disrupted flow | Squad depth has maintained competitiveness |
Chess and Analytical Mindset
In our conversation, another remarkable facet of Dan’s life emerged: his past as a junior chess player for England. He captained the London team in Hamburg and played for England in Ukraine. This experience honed his analytical skills, essential in his role today. Continuing his passion, he remains a valued member of his workplace chess team.
The Growing Tide of Passive Investments
The passive investment trend in the UK mirrors its growing prominence in the US. Dan expressed enthusiasm over this shift, which has gradually reduced costs and made the benefits of passive investing more evident. The rise of ETFs and passive funds has made it easier for investors to align with the current landscape without the former resistance.
Thus, our luncheon with Dan Caps was indeed insightful—a rich blend of history, investment philosophy, and personal anecdotes, naturally seasoned with the flavours of English hospitality.
