Justin times

On reflection, I’m braced for anything

28 Nov 2016

Anna Mikhailova, The Sunday Times

The City veteran manages £10bn of our money but still loves driving an old Morris and collecting points on his Tesco Clubcard.

Justin Urquhart Stewart describes himself as a saver and a spender, listing Philip Jackson sculpture and Roman coins among his indulgences. After being crippled by credit card debt at university, Justin Urquhart Stewart has never managed to conquer his fear of credit cards.

The stockbroker, who is as well known for his enthusiasm for wearing red braces as for his financial commentary, studied law at Southampton University and then trained as a criminal barrister. However, he never practised as one.

“My pupil master said, ‘Justin, you realise there is more money in crime than in defending it?’ So, obviously, financial services beckoned,” he joked.

Urquhart Stewart joined the international arm of Barclays and was posted to Uganda, where he was wounded by gunfire in the aftermath of a coup. Soon afterwards he went to work for the bank in Singapore and then helped to set up what is now Barclays Stockbrokers. In 1995 he was involved in establishing the Alternative Investment Market (AIM), the stock exchange for smaller companies.

In 2002, Urquhart Stewart co-founded Seven Investment Management (7IM), which now has more than £10bn of assets under its management.

Next year he will launch Investors in Community, which will help companies to organise their charitable giving and enable individuals to cut out charges on their donations. He is also studying the economy of the Roman Empire part-time at Southampton University.

Urquhart Stewart, 61, lives in Hammersmith, west London, with his wife, Francesca, 65, who teaches upholstery. They have one daughter, Tiwi, 31.

How much money do you have in your wallet?
I have a 1950s £5. I do lectures to trainee paraplanners [junior financial planners] about the history of London. As part of it, I show them how banknotes have changed over the years. Then we sit outside the Bank of England and I go through all the people who managed to lose more money than Gordon Brown.

I also have a 1bn mark note in my wallet, from when Germany had hyperinflation [in the 1920s].

What credit cards do you use?
I have the world’s most embarrassing card — a Tesco Clubcard. You’d be mad not to collect points.

When I worked in Singapore, you would never dare have a card, because if you turned up with a gold card, everyone would say: “Oh, you’ve only got a gold card.” If you turned up with a platinum card, they’d say: “Haven’t you got the black card?” You’d carry cash, so nobody would know.

Are you a saver or a spender?
Both. I have always had a fear of debt. Like most people, I did not understand money at all while I was at university.

I had a terrible Barclaycard with a few hundred pounds of debt on it, which you wouldn’t regard as a lot now, but I could never move it. I didn’t understand interest rates and how compounding works. It took me about six years to get rid of the debt. Now I set my credit card to pay off my whole balance every month automatically. Under no circumstances do I run any debt on it at all.

How much did you earn last year?
Quite a lot. Most of my investment is in the business.

Have you ever been really hard up?
When I set up 7IM, I sold a flat I had and remortgaged our house. That was in the days of self-certification, thank God. While at university, I worked on building sites, including on the Southampton docks. I think I am the only former shop steward in the stock exchange. I was the shop steward for Ucatt [the construction workers’ trade union].

Do you own a property?
We have a house in Hammersmith. We also have three buy-to-let flats in [nearby] Chiswick, all in the same building. We have had our house for 25 years, having bought it for about £200,000. It is now worth about £1.3m. The area has changed — nearly 50% of the cars in our street are 4x4s. I drive a Morris Minor Traveller — it would fit in the boot of one of the big Audis.

What was your first job?
My mother sent me to work at the butcher’s when I was 12. She told me I would be drawing chickens, so I set off with a pencil and pad — I didn’t know what drawing chickens meant. Unfortunately, it is a term for gutting them.

What’s been your most lucrative work?
Working here [at 7IM] — not in terms of pay but overall, because the business has grown in value. It is a great privilege to look after people’s money.

Are you better off than your parents?
Yes. My father, Peter, was in the Gordon Highlanders but retired on a military pension because he was ill. My mother, Angela, had her own income — a reasonable sum of family money, but not as much as we’ve got in this generation. We’re the baby-boomers. My mother would have been a very good businesswoman today, but she was born in the wrong era.

Do you invest in shares?
Yes. My investments are spread around the world, in shares, bonds, property through funds, commodities, as well as cash. The answer is huge diversification.

I don’t want a table on four legs — I want a millipede.

What’s better for retirement — property or pension?
These days, pensions will give you greater flexibility. You need to think about having enough assets to retire on. I hate the fixation on: “Property is solid, it doesn’t go down.” Yes, it does.

Do you have a target number of how much you want to retire on?
Yes. I always had the number in my mind that I need for the family pot, including for possible care home costs — that’s the bit we normally do not factor in, because nobody wants to talk about it. I use a financial planner, because I’m not a tax expert.

When did you first feel wealthy?
When I landed in Uganda. Barclays posted me there and I remember saying: “Excuse me, isn’t there a war on?” and they said: “Yes, so we need more people out there.” It was like something out of Blackadder. But, going out there, you realised how much you took for granted and appreciated just how lucky you were.

I was the first one in my family for many generations who didn’t join the army. I told my mother I wanted to go into business. She was a delightful lady but quite snooty and said: “Oh, you want to go into trade?”

After decades of people in my family being in the army and not getting shot, I went out to Uganda and found myself getting shot. There was a coup. We drove past what we thought was a checkpoint and it turned out it had moved. I was injured in the leg, face and back.

What’s been your best investment?
Building the business.

And the worst?
Friends’ companies. You invest for the wrong reasons, because you’re trying to help, and you’re not applying the same diligence. The most I have given is £20,000.

What’s the most extravagant thing you have ever bought?
I bought two small Venetian-style sculptures by the sculptor Philip Jackson, for about £30,000. They will be an investment, but that’s not why I bought them — they are just beautiful.
Justins Car
No 4x4 for him: Urquhart Stewart’s Morris Minor Traveller

What’s your money weakness?
I collect Roman coins. I won’t spend very much — they can be from £10 to £100.

What aspect of the tax system would you change?
Most of it. It is out of date and not fit for purpose. Stamp duty is particularly stupid. It is a negative tax. You want people to move house, because then they do up the kitchen and the bathroom. You will get more money being spent, more VAT being paid.

Do you support any charities?
I have always had a separate charity bank account. I am also setting up Investors in Community.

What would you do if you won the lottery jackpot?
The first thing you notice when you win a jackpot is just how large your family has become. So first, you set up your family trust. I would give away the rest. It would be great to be in a position to make a tangible difference to people’s lives.

What is the most important lesson you have learnt about money?
Learning about the need for it, the benefit of it and the horror of not having it.

Anna Mikhailova
The Sunday Times

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