Terry Smith (businessman)

Terence Smith MNZM (born in 1953, London, England) is the founder and chief
executive of Fundsmith and a notable British fund manager. He was formerly the
chief executive of Tullett Prebon and Collins Stewart. He is a bestselling author
and a regular media commentator on investment issues.

He has been referred to as "the English Warren Buffett" for his style of growth
investing, which involves buying and holding shares in a relatively small number
of established companies.[1]

Smith was made a Member of the New Zealand Order of Merit in 2012, after his
work in recognising the contribution of Sir Keith Park during the Battle of
Britain. In 2016, Smith received an Honorary Fellowship from Cardiff
Smith (left), after his investiture as a
University.[2] Member of the New Zealand Order of
Merit by the governor-general, Sir
Jerry Mateparae, in 2012

Contents
Early life
Early career
Accounting for Growth
Collins Stewart and Tullett Prebon
Fundsmith
Other interests
References
External links

Early life
Smith grew up in East London where he attended Stratford Grammar School before reading history at University College Cardiff
in 1974, graduating with a First.[3] He turned down an offer of research fellowship to pursue a career in business.

Early career
Smith worked for Barclays Bank from 1973 to 1984. He managed the Pall Mall branch before transferring to the firm's finance
department, where he developed an interest in stock analysis. He obtained an MBA from Henley Management College in 1979.

He left Barclays to work at W Greenwell & Co as a research analyst. Later he joined Barclays de Zoete Wedd where he was a
number-one rated banking analyst, earning notoriety for writing a sell note on Barclays itself.[4]

In 1990 he was appointed Head of UK Company Research at UBS Phillips & Drew, a position from which he was dismissed in
1992 following the publication of his best-selling book Accounting for Growth.
Accounting for Growth
In 1990 a series of high-profile FTSE 100 public companies went bust, including Polly Peck and British and Commonwealth.
Smith's clients wanted to know why these firms had failed despite posting apparently healthy profits. In response, Smith wrote an
analysts circular showing that these firms had run into difficulties with cash flow, rather than profitability, and in some cases had
used deliberately misleading accounting techniques.

Smith's paper examined 12 of these techniques; the paper's title, Accounting for Growth, was intended as a pun. The paper was
well-received and led to a book publishing contract with Random House. UBS asked Smith to withdraw the book.[5] Both Smith
and Random House refused. UBS suspended Smith before firing and suing him. Smith counter-sued; the two parties settled out of
court 18 months later.[6]

The controversy helped propel the book to the top of the bestsellers chart, displacing Stephen Hawking's A Brief History of Time
from the no.1 spot and eventually selling over 100,000 copies.

Collins Stewart and Tullett Prebon

Smith joined Collins Stewart in 1992, shortly after being fired from UBS. He became a director in 1996; in 2000 he became Chief
Executive after leading a management buy-out. The company floated on the London Stock Exchange in the same year. In 2003,
Collins Stewart acquired Tullett Liberty, and then in 2004 acquired Prebon Group, creating Tullett Prebon, the world's second
largest inter-dealer broker.

Collins Stewart and Tullett Prebon were demerged in December 2006. Smith served as chairman of the demerged Collins Stewart
entity from 2006-2010. In September 2014, Smith announced his retirement as director and deputy chairman of Tullett Prebon in
order to concentrate on Fundsmith.[7]

During Smith's tenure as Chief Executive of Tullett Prebon, he produced some £2 billion in shareholder value.

Fundsmith
In 2010 Smith set up a new business, Fundsmith, a fund management company headquartered in London. The business has one
strategy, which it applies across the Fundsmith Equity Fund and Fundsmith Emerging Equities Trust. Fundsmith was set up to be
the main vehicle for Smith's investments; he now has over £60m invested in the fund. As of October 2018, Fundsmith manages
over £17bn.

Smith is a noted critic of the established fee structure of investment management firms, claiming that most managers churn their
stocks too many times, and that retail investors often lose the bulk of gains to excessive management fees and expenses. In 2014
he said: "Last year we spent £98,000 on dealing on a £3.5 billion fund, meaning total dealing costs were 0.005%. The FCA
statistics suggest the average fund manager in the UK spends 1-1.5% on dealing. It’s a big drag on performance.” Writing in the
Financial Times, Smith has used a Tour de France analogy to explain his long-term investment philosophy. He states that it is
pointless to search for a fund manager who can perform well in all market conditions, likening them to cyclists in the Tour, which
“has never been won by a rider who won every stage, and it never will. Like the Tour, investment is a test of endurance, and the
winner will be the investor who finds a good strategy or fund and sticks with it.”[8]

Other interests
Smith is a frequent media contributor and has written for a number of outlets, including a regular column for the Financial Times.
Until 2013 he kept a blog, Terry Smith Straight Talking, writing extensively on financial and political issues. Smith is a
eurosceptic and advocated the United Kingdom's exit from the European Union.
Smith studied history and remains interested in the subject, particularly military history. In 2008, Smith initiated then led and was
chairman of the Sir Keith Park Memorial Campaign that erected a statue of Sir Keith Park on the Fourth plinth in Trafalgar
Square, in recognition of his work as commander of No. 11 Group during the Battle of Britain.[9][10][11] A permanent statue was
subsequently erected in Waterloo Place, London, and was unveiled on 15 September 2010 – the 70th anniversary of the Battle.

In recognition of Smith's efforts, he was appointed a Member of the New Zealand Order of Merit in the 2012 New Year Honours,
for services to New Zealand–United Kingdom relations.[12]

In 2016, Cardiff University awarded Smith, an alumnus of the university, an Honorary Fellowship.

Debrett's People of Today lists Smith's interests as boxing, shooting and flying. He is also a competitive cyclist and an exponent
of Muay Thai.[13]

References
Notes

1. Collinson, Patrick (6 November 2010). "Investment funds: Is Terry Smith the new Warren Buffet?" (https://www.th
eguardian.com/money/2010/nov/06/investment-funds-terry-smith-warren-buffet). the Guardian. Retrieved 19 July
2016.
2. "Prestigious line-up receive Honorary Fellowships" (http://www.cardiff.ac.uk/news/view/378454-prestigious-line-u
p-receive-honorary-fellowships). Retrieved 19 July 2016.
3. Biographical details from Smith's personal blog (http://www.terrysmithblog.com/straight-talking/about-terry-smith.
html)
4. "CITY INTERVIEW: He fought his way out of the East End to become City grandee, now Terry Smith is squaring
up to errant bankers" (http://www.thisismoney.co.uk/money/news/article-2168844/CITY-INTERVIEW-Fundsmith-b
oss-Terry-Smith-squares-errant-bankers.html). Retrieved 19 July 2016.
5. "Phillips & Drew suspends researcher" (https://www.independent.co.uk/news/business/phillips-drew-suspends-re
searcher-1540062.html). 12 August 1992. Retrieved 19 July 2016.
6. "Saturday Profile: Accounting for Smith" (https://www.telegraph.co.uk/finance/personalfinance/comment/446765
6/Saturday-Profile-Accounting-for-Smith.html). Retrieved 19 July 2016.
7. Collins Stewart demerger raises prospects of a bid (http://business.timesonline.co.uk/tol/business/industry_sector
s/banking_and_finance/article743386.ece)
8. Evans, Richard."Terry Smith's Fundsmith: the top five holdings" (https://www.telegraph.co.uk/finance/personalfina
nce/investing/8214851/Terry-Smiths-Fundsmith-the-top-five-holdings.html) Daily Telegraph 20 December 2010.
Retrieved: 3 July 2012.
9. Smith, Terry. "The Sir Keith Park Memorial Campaign site." (http://www.sirkeithpark.com) sirkeithpark.com.
Retrieved: 17 June 2010.
10. Harding, Thomas. "City boss calls for statue of war hero". (https://www.telegraph.co.uk/news/main.jhtml?xml=/ne
ws/2008/02/25/nhero125.xml) The Daily Telegraph 26 February 2008. Retrieved: 16 August 2008.
11. "They were the Few - but Sir Keith Park was a one-off." (http://business.timesonline.co.uk/tol/business/movers_a
nd_shakers/article5576596.ece) timesonline.co.uk, 24 January 2009. Retrieved; 16 June 2010.
12. "New Year honours list 2012" (https://www.dpmc.govt.nz/publications/new-year-honours-list-2012). Department of
the Prime Minister and Cabinet. 31 December 2011. Retrieved 8 January 2018.
13. " 'If I take my hands and feet off the controls, we'll all be dead in a minute and a half' | The Times" (http://www.thet
imes.co.uk/tto/business/moversshakers/article1891235.ece). Retrieved 19 July 2016.

External links
Terry Smith Straight Talking blog (http://www.terrysmithblog.com/)
Retrieved from "https://en.wikipedia.org/w/index.php?title=Terry_Smith_(businessman)&oldid=898697870"

This page was last edited on 25 May 2019, at 10:12 (UTC).

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