Former BlackRock commodity fund manager Graham Birch is rejuvenated by his new life as a sheep and dairy farmer in southwest England
Graham Birch's knee-high boots are caked with mud as he climbs onto his tractor. His two dairy and sheep farms in southwest England cover 3,658 acres, an area more than five times the size of the City, London's financial district, where Birch worked for the last quarter-century in shoes seldom covered in anything but a shine.
In his job at BlackRock (BBK), which is headquartered in New York, Birch oversaw $36 billion and ran five commodities-related funds. Worrying about other people's pensions all day became exhausting. "It's not the hours themselves—it's the responsibility," says Birch, 49, who headed BlackRock's natural resources team for 11 years. The BlackRock Gold & General Fund, which Birch managed from 1999 until last year, was the top performer among 858 U.K.-domiciled mutual funds over the last decade, rising almost 23% annually, according to Morningstar (MORN). "At the peak we had $40 billion of people's savings. That's like a weight that pushes down all the time. I couldn't do that forever."
Success in finance had made Birch wealthy, but not content. So he traded it in for a world he knew little about. "I had never driven a tractor," he says. That was the point: "I needed a complete change." Now he has 560 dairy cows, 1,000 pregnant sheep, and a storage tank filled with 4 million liters (about 1 million gallons) of manure used for fertilizer. He produces 3 million liters of milk a year, enough to fill an Olympic swimming pool.
Birch, who helped start and run a BlackRock hedge fund focused on agriculture, brings a money manager's sensibility to raising cows. "You can't be sentimental about it," he says. "These are adorable, but in a year we're going to sell them." With the guidance of Scott Bagwell, his 30-year-old farm manager who grew up a mile away as a son of a herdsman, Birch learned to drive a tractor. The farms have a total of six employees, and Birch sometimes helps with the afternoon milking. He makes his own cheddar cheese and sloe gin.
A sabbatical from BlackRock in April 2009 let Birch test the waters. He was supposed to return to the firm this year. In January he resigned instead. "I wanted to see whether I would miss the job and discovered I didn't miss it much at all," says Birch, who has a doctorate in mining geology from Imperial College London. "Fifteen years is long enough to do one thing. I've been to every Rio Tinto results presentation for, like, 25 years. I began to think I'm not learning anything new. If you stop learning new things, life becomes very, very boring."
His wife, Margaret Scribbins, 50, says the change has been good for the couple and their five children. They live in St. Albans, 126 miles from the farms in Dorset. Birch spends a few days a week at his farms—he has a cottage at the dairy farm. The family plans to stay in St. Albans until the youngest children, 13-year-old twins, finish school. Scribbins, an accountant by training, keeps the books. "He looks five years younger with the farm," she says of her husband, who has lost 14 pounds.
Birch hasn't completely abandoned his old life. He still holds some agricultural stocks, including Monsanto (MON), the world's largest seed maker, and follows the mining news from a computer in his spartan office on the farm. He joined London-based gold producer Petropavlovsk last month as a nonexecutive director. If he ever went back to managing money, it would have to be a much smaller place than BlackRock, "where I could make a real difference as an individual," he says. He has no plans to do that, though.
The money Birch has poured into his farm includes 400,000 pounds ($609,300) for a grain storage building, 150,000 pounds for a new harvester, 50,000 pounds for new barns. He takes no salary and hopes to turn a profit this year. It may be a tough slog. The number of British dairy farms has fallen 54% since 1995, according to the Dairy Farming Information Centre, a nonprofit funded by milk producers. Prices paid to farmers were down 5% last year from 1995, data from the Department for Environment, Food & Rural Affairs show.
Birch predicts the market will turn. "As more of the farms get pushed out of the business, the farms that remain get the opportunity," he says. His larger one is 17 times the average size of farms in Britain. "As long as demand is there, which is the case for dairy products, then prices will go up. We've seen it in gold, copper. I think we're heading that way with agricultural business. That's why we got into agriculture. Prices have been too low for too long."
Rising prices for U.K. farmland have made Birch's gamble a good bet so far. Since he first bought in southwest England in October 2007, prices have risen 28%, according to London-based property adviser Knight Frank. That's all well and good, but Birch has a different focus at the moment. "Two thousand lambs are going to be born over the four weeks" starting in late March, he says. "It is going to be hectic."