Appian Wealth Company Profile

(Sunday Times – Business and Money Section 6th June 2004 - By Ciaran Hancock)

PATRICK LAWLESS is the managing director of Appian Wealth Management. Based in Dublin, it was founded in 2002 through a management buyout of the private wealth side of Aberdeen Asset Management (Ireland) led by Lawless and Donal Roche, the fund manager's chairman.

The fund manager offers bespoke investment advice to clients, who include high net worth individuals, charities, credit unions and pension funds. It employs 14 staff and has almost ¤200m in assets under management.

Previously, Lawless was the head of investment at the IFSC-based operation of ABN Amro, the Dutch bank, where he spent five years. He also worked for Davy Stockbrokers

Investment Philosophy

Appian Wealth Management advises clients to invest for the long term and to ignore investment fashions. "We are wealth protectors through long-term value investment," Lawless says. "People should have a five-to-10-year horizon with us," says Lawless. "We take a conservative attitude to risk across all the asset classes, namely cash, equities, bonds, property and commodities. We seek to buy excellent assets at reasonable prices."

Performance

Appian manages balanced accounts, mostly for high net worth individuals, offering a spread of investments across all asset classes. It also offers investment accounts for those seeking a conservative approach including charities and credit unions. These are mostly invested in corporate and government bonds.

The fund manager achieved an average 14.2% return last year on its "balanced accounts" and growth so far this year of 4.5%. In terms of investment accounts, Appian has achieved a return of 9.6% over the past two years and 4.7% last year.

Buying and selling

Recently Appian Wealth Management reduced its weighting in equities from 70% to about 55% due to a "cocktail of risks", including rising interest rates, uncertainty over oil prices, the upcoming US presidential elections and peaking in corporate earnings. The balance is held in cash and bonds.

"We've decided to take our money off the table in some stocks and we're also looking at a number of defensive sectors," says Lawless says. "We think that earnings growth might be peaking after a strong run in 2003," says Lawless.

Among those equities it has sold are Altria, the tobacco company that owns Philip Morris, whose share price had risen by 40% since the fund manager bought stock in the company.

"A ruling in relation to tobacco litigation in the US being taken by the justice department went against the industry recently and, with the trial of the case due to start in September, investor sentiment towards the industry has been hit," he explains. "We felt it was time to take our gain, although there might be an opportunity for us to get back into the stock at a later date."

It also sold its holding in Heineken, the Dutch brewer, recently, and reduced its holding in Fyffe’s, the Irish banana importer. "Heineken's shares had reached a premium valuation in relation to its peer group while the fluctuating dollar could affect Fyffe’s," says Lawless.

Outlook

"We are cautious because of the cocktail of risks out there but there are also opportunities for value investors such as ourselves," he says. "Against this background, we believe that investors should adopt a defensive strategy and value should be the most important factor when assessing investment options.

”We think there's value to be had from food producers, food retailers and we're also looking closely at the pharmaceutical sector. "We'd be happy with a total return for this year of 8-9%, of which we've already booked about half in the year to date."