Speaker 1: This is Mesters in Business with Very Renaults on Bluebird Radio.
Speaker 1: This week on the podcast, I have another extra special guest.
Speaker 1: Her name is Lisa Jones. She's CEO of Amunday US
Speaker 1: that's the American division of French asset management giant Amundi.
Speaker 1: They could be the largest asset manager that most people
Speaker 1: are unfamiliar with. They run over two trillion dollars about
Speaker 1: one point seven three trillion euros. That's a lot of money.
Speaker 1: They're they're the second largest asset manager in Europe after Alians.
Speaker 1: They're one of the top ten asset managers. They're they're
Speaker 1: just immense. Uh. Lisa Jones division is over a hundred
Speaker 1: billion dollars and she really has a unique perspective on
Speaker 1: the asset management business. She has worked at a number
Speaker 1: of places um usually uh switching jobs because her from
Speaker 1: was required or she was offered a bigger job at
Speaker 1: a at another shop. So she's been at places like
Speaker 1: Eaton Vans and Pioneer Funds and and Morgan Stanley and MFS.
Speaker 1: So she knows all there is to know about all
Speaker 1: three parts of the industry, the what some people call
Speaker 1: client facing, back office and and middle part of the office,
Speaker 1: which is the actual asset management. She's uniquely qualified to
Speaker 1: discuss what's going on in the industry, where it's been
Speaker 1: and where it's likely to to end up. I found
Speaker 1: the conversation to be absolutely fascinating, and I think you
Speaker 1: will also so, with no further ado, my conversation with
Speaker 1: a Mundy US is CEO Lisa Jones. This is Mesters
Speaker 1: in Business with very Renaults on Bluebird Radio. My extra
Speaker 1: special guest this week is Lisa Jones. She is the
Speaker 1: CEO of A Monday US, the hundred billion dollar our
Speaker 1: u S arm of Europe's second largest asset manager, A Monday.
Speaker 1: A Monday proper manages over to trillion dollars in assets.
Speaker 1: They're one of the ten largest asset managers in the world,
Speaker 1: with over a hundred million clients in thirty six countries,
Speaker 1: about forty hundred employees. Lisa Jones, Welcome to Bloomberg. Thanks Berry,
Speaker 1: Thanks for having me here today. My pleasure. I've been
Speaker 1: looking forward to chatting with you for a while. I
Speaker 1: think of A Monday as as really one of the
Speaker 1: largest asset managers that a lot of people, especially in
Speaker 1: the US, haven't heard of. But before we get to
Speaker 1: a Monday. Let's talk a little bit about your early
Speaker 1: career experience. You come out of Trinity College with the
Speaker 1: bachelor's in economics and you started MFS Investment Management. Tell
Speaker 1: us a little bit about your early experiences in the industry.
Speaker 1: So you know, I've been working for thirty years, so
Speaker 1: when you say tell me about your early experiences, sure
Speaker 1: we don't go on for so long. But actually, prior
Speaker 1: to m f S, I started working at ef Hutton.
Speaker 1: For those of your listeners who remember EF Hutton, Trinity
Speaker 1: is in Hartford, and at that point in time, you
Speaker 1: went to New York or you went to Boston, and
Speaker 1: I was from Boston, so I wanted to take a
Speaker 1: shot at working in New York City, and I started
Speaker 1: working for E. F. Hutton and worked there for a
Speaker 1: few years, really worked there through the Crisis of nineteen
Speaker 1: eight you know, the stock market crash um in the
Speaker 1: late nineteen eighties, and started in customer service of EF
Speaker 1: Hutton for those brokerage accounts where shareholders wanted to call
Speaker 1: and ask questions and get some answers. It was a
Speaker 1: great introduction into being in a client facing role. And
Speaker 1: so from there I went to work at MFS in Boston.
Speaker 1: I joined MFS in I joined MFS as a whole
Speaker 1: salor covering the bank channel. The territory was the northeast
Speaker 1: and back then in the bank channel, the northeast was
Speaker 1: really mained down to Virginia. And it was in the
Speaker 1: early days there beyond bank trust departments, banks were beginning
Speaker 1: to have licensed investment professionals sit in their lobbies to
Speaker 1: offer alternatives to banking customers. And that was my first
Speaker 1: experience working at MFS as a wholesaler. I then, as
Speaker 1: the time went on, began to become in house more
Speaker 1: in a management role and assume responsibility for running the
Speaker 1: bank channel at MFS. And keep in mind, as we
Speaker 1: think about the world of investing today and talking about
Speaker 1: low interest rates, this is a period of time when
Speaker 1: CDs were double digit, UH treasuries were double digit and
Speaker 1: so it was quite a different vin erment for selling
Speaker 1: investment products in yields of that at that point in time.
Speaker 1: So is that MFEST for a total of sixteen or
Speaker 1: so years years I'll suspend some time on the institutional
Speaker 1: side running the global institutional business for at that time.
Speaker 1: So so let's talk a little bit about that global
Speaker 1: institutional business. Eventually you end up as global head of
Speaker 1: distribution at Morgan Stanley's what enabled you to climb to
Speaker 1: the top of that ladder? And how different is institutional
Speaker 1: and distribution from what people typically think of as individual investments.
Speaker 1: So today I would say that those lines between the
Speaker 1: two groups are blurring. But let's go back to the
Speaker 1: point in time of when I transition from what we
Speaker 1: would call the kind of retailer the distribution side, to
Speaker 1: the institutional side, being responsible for running the bank channel.
Speaker 1: At that time, I was engaged with the bank trust
Speaker 1: departments and they would be hiring external managers to offer
Speaker 1: investment solutions to trust clients. And I began working very
Speaker 1: closely with the portfolio managers and becoming more um understanding
Speaker 1: and involved and frankly really intrigued with portfolio construction and
Speaker 1: portfolio management. And so as the business at MFS grew,
Speaker 1: the opportunity for me to transition to the institutional side
Speaker 1: was presented to me. So I enjoyed how the pms
Speaker 1: put portfolios together, how they thought about risks, how they
Speaker 1: thought about buying cell discipline and the institutional side got
Speaker 1: me much closer to overall portfolio construction and portfolio management,
Speaker 1: and as ussset management firm began to want to go
Speaker 1: global and enter international market. UM, my role was expanded
Speaker 1: into global head of Institutional where MFS was in multiple
Speaker 1: different markets kind of offering our investment solutions and strategies
Speaker 1: to sovereign well fund central banks, UH and pension fund investors.
Speaker 1: And so that was UH the opportunity to go from
Speaker 1: retail to distribution when you bring those two together. UM.
Speaker 1: I then from MFS, I actually went to eat Vance
Speaker 1: to run the eat Vance Global institutional business, and I
Speaker 1: got a call out of the blue from the former
Speaker 1: CEO of MFS when I was there, Jeff Shames. Many
Speaker 1: of your long time listeners may remember Jeff, and he
Speaker 1: had taken a role at MFM at Morgan Stanley Investment
Speaker 1: Management as an advisor, and at that time, Morgan Stanley
Speaker 1: Investment Management was looking for a new role, global Head
Speaker 1: of Distribution, which encompassed both institutional and retail distribution on
Speaker 1: a global scale. So my experience at both MFFT any
Speaker 1: evance on the retail on the institutional side gave me
Speaker 1: the global awareness the retail in the institutional background serving
Speaker 1: multiple different types of clients and it fully wrapped up
Speaker 1: into that role at EMSUM on being global head of distribution.
Speaker 1: So how do you make the leap from Morgan Stanley
Speaker 1: where you're really on on what I think a lot
Speaker 1: of people would perceive as an institutional sales side to
Speaker 1: a Monday in where really you're running the whole shooting
Speaker 1: match for at least for the US arm which is
Speaker 1: you know, a hundred billion dollars is still real money.
Speaker 1: Great question. So, as I've worked at different organizations, I
Speaker 1: became familiar with and really became a student of culture.
Speaker 1: And when you have the magic of a positive culture
Speaker 1: and you can bring people together, you can create an
Speaker 1: environment where people have fun. You you treat your clients
Speaker 1: and your employees exceptionally well. And culture is a key
Speaker 1: aspect of long term success. And having observed multiple cultures
Speaker 1: across the many firms, I knew that I wanted to
Speaker 1: be a champion of a culture. And it is easier
Speaker 1: when you have influence over the entire organization rather than
Speaker 1: when you have only influence over the distribution side, institutional
Speaker 1: or retail. And in two thousand and fourteen, prior to
Speaker 1: being known as a Monday, the firm was Pioneer Investments,
Speaker 1: and Pioneer Investment has been just I mean, you know
Speaker 1: Pioneer right. We've been in the market since nine, launched
Speaker 1: one of America's first mutual funds, and having worked in
Speaker 1: and around the Boston community in the asset management space
Speaker 1: for a long time, always had tremendous respect for Pioneer Investments.
Speaker 1: Knew some of the employees that were working at Pioneer Investment,
Speaker 1: some of them have worked for me at other organizations,
Speaker 1: and Pioneer was looking for a us CEO and wanted
Speaker 1: the profile of the us CEO to be someone that
Speaker 1: comes from a client facing background, and so the opportunity
Speaker 1: for me was one. It was a profile that I had,
Speaker 1: but number two because I knew that I had great
Speaker 1: experience and bressed across multiple firms, working across an organization,
Speaker 1: and the value I believe that I brought to the
Speaker 1: firm you know at the time and hopefully fill today
Speaker 1: as you talked to my employees, is an appreciation for
Speaker 1: culture and appreciation of working together and in particular for
Speaker 1: my investment team, having worked at such broad based asset
Speaker 1: management firms in the way of investment offerings and product
Speaker 1: in essence, I have been out of teams that have launched, sold, retained, defended,
Speaker 1: closed all types of investment strategies across multiple market cycles,
Speaker 1: to multiple geographies and multiple channels. So while I've never
Speaker 1: had the opportunity to actually run money, all that's important
Speaker 1: around it that is really important to portfolio managers, you know,
Speaker 1: being investment lad consistency and repeatability of an investment process,
Speaker 1: taking long term view. That was complementary to the investment
Speaker 1: team here, and fortunately I was given the opportunity to
Speaker 1: take the role in two thousand and fourteen, UH the
Speaker 1: organization at that time, very interestingly, was up for sale.
Speaker 1: It was owned by UniCredit Bank UH, a large Italian
Speaker 1: based bank, who had acquired Pioneer in the year two thousand.
Speaker 1: So the employees at Pioneer Investors had exposure and had
Speaker 1: been familiar with going through an integration and being purchased
Speaker 1: by a European based financial institution, and in two thousand
Speaker 1: and seventeen the transaction closed with the money acquiring Pioneer
Speaker 1: Investments got it. So, so I want to stay with culture,
Speaker 1: which you've you've referenced a couple of times and asked
Speaker 1: what was it like trying to maintain that sense of
Speaker 1: corporate culture and objectives and the whole team all pulling
Speaker 1: in the same direction. During the lockdown, during the pandemic,
Speaker 1: when everybody had to work from home and there was
Speaker 1: a lot of uncertainty as to what was going to
Speaker 1: happen next, and people were genuinely nervous. Tell us what
Speaker 1: you did to maintain that corporate culture. It's been one
Speaker 1: of the greatest challenges in learnings, I think for anyone
Speaker 1: who's in a position of leadership that we've experienced over
Speaker 1: the West eighteen or twenty months. And if you recall
Speaker 1: in March of when we all went home to work remotely,
Speaker 1: we had put out messages that we expect to be
Speaker 1: back in the office in thirty days. So when we
Speaker 1: went remote, I didn't give it any thought other than
Speaker 1: let's stay in contact with everyone, let's continue to have
Speaker 1: our meetings. And it's thirty one to sixty to eighteen
Speaker 1: months later. Immediately you had to kind of shift stage right.
Speaker 1: And what I ended up really bringing into the organ
Speaker 1: bringing into this kind of leadership during a COVID environment
Speaker 1: is my communication skills, and so I adapted my ability
Speaker 1: to walk the halls and be with people to putting
Speaker 1: together a series of programs on how do I remain
Speaker 1: connected and how do we be transparent and how do
Speaker 1: we communicate? So in the first several weeks, I sent
Speaker 1: out a daily email message to the organization and it
Speaker 1: was as soon as go out for a walk and
Speaker 1: get some fresh air, or here is a final that
Speaker 1: we participated in virtually, or here's what's going on in
Speaker 1: the investment department. Are here's the news from our I
Speaker 1: T department as we've all gone remotely and people were
Speaker 1: positively responding to those daily email messages. And as the
Speaker 1: days and weeks went on, the daily notes became too
Speaker 1: tactical and we needed to shift a bit more strategically.
Speaker 1: So I implemented both a weekly All America's conference call
Speaker 1: with everyone dialing in and it was thirty minutes because
Speaker 1: we were we were all starting to experience kind of
Speaker 1: uh burnout fatigue with the multiple zoom calls fatigue right,
Speaker 1: And I also launched weekly coffees with Lisa. It was
Speaker 1: every Thursday from ten to ten forty five and I
Speaker 1: limited the group to eight or ten people sign up.
Speaker 1: My s watch your cat, you know one across your
Speaker 1: your keyboard, Let's listen to the kids screaming in the background,
Speaker 1: Let's talk about what it's like to work remotely, and
Speaker 1: so culture for me during that pandemic was best supported
Speaker 1: by being present in the new ways that we had
Speaker 1: to be present, and we continued that really through still
Speaker 1: to this day. While many of us are back in
Speaker 1: the office still on a voluntary basis. My weekly calls
Speaker 1: are now every two weeks. In fact, later on today
Speaker 1: we're doing a virtual town hall. It's all employees, but
Speaker 1: we've had to adapt our communication skills that we've developed
Speaker 1: as leaders into new ways. I think it was the
Speaker 1: Washington Post that had a column to this week that
Speaker 1: workers are are putting on clothes and going back to
Speaker 1: the office only to spend all day on zoom calls.
Speaker 1: How do you avoid those circumstances, says or are you
Speaker 1: guys going to continue UM to be a little bit
Speaker 1: hybrid where people come into the office partly and work
Speaker 1: from home partly. So we have rolled out a we're
Speaker 1: all coming back into the office on October. Our offices
Speaker 1: have been opened since June on a voluntary basis, and
Speaker 1: we're seeing more and more people come into our offices.
Speaker 1: UM in particular Boston in Durham, North Carolina. And what
Speaker 1: we really talked about to your point is it doesn't
Speaker 1: make sense if we're all commuting an hour to come
Speaker 1: into the office to be on a zoom call. Because
Speaker 1: what we know is productivity is super good working in
Speaker 1: remote locations. So what we've tried to challenge ourselves with
Speaker 1: is that the home office remains as a place of productivity,
Speaker 1: then the physical office at sixty State Street remains the
Speaker 1: place for collaboration. So as we go to a hybrid model,
Speaker 1: and we're asking people to come back three days a week,
Speaker 1: any three days that you want, but we're asking the
Speaker 1: department heads to make sure that you're scheduling and hosting
Speaker 1: your team meetings all on one day where you're asking
Speaker 1: all employees to come back into the office of your
Speaker 1: team so you can have that team meeting and you
Speaker 1: can have that collaboration. Because the zoom calls work when
Speaker 1: everyone is remote, it gets more challenging when some are
Speaker 1: remote and some are sitting around a table. You you
Speaker 1: end up getting a very different meeting dynamic that is
Speaker 1: not all that productive. So we've thought about that and
Speaker 1: that's the way that we're going to try to ensure
Speaker 1: that you're not sitting all by yourself on zoom calls,
Speaker 1: because frankly, you can do that from home. Quite quite interesting.
Speaker 1: Tell us a little bit about your role. What do
Speaker 1: you do as CEO of a Monda US so a
Speaker 1: CEO of Amunda US variant all so, I bring in
Speaker 1: Canada and Latin America as heads of those regions as well.
Speaker 1: So we have offices that I'm responsible for from Montreal, Toronto, Boston, Durham,
Speaker 1: North Carolina, Miami, Mexico City, in Santiago, Chile, so all
Speaker 1: up and down the America's perimeter. From a US perspective,
Speaker 1: we are a full organization of all the infrastructure you
Speaker 1: would expect for a large asset management firm, portfolio management, trading,
Speaker 1: legal compliance, i T, marketing, distribution, et cetera. So my
Speaker 1: responsibility is across all of those aspects of front, middle
Speaker 1: and back office as we distribute our investment solutions here
Speaker 1: throughout the America's but we also, if you will, export
Speaker 1: our investment capabilities outside of the America's And as a
Speaker 1: member of the Global Executive Committee of a Monday, I
Speaker 1: work very closely with the other countries and regions whose
Speaker 1: clients are interested in US dollar denominated product. So so
Speaker 1: let's talk a little bit about UM, the global giant
Speaker 1: that is a mundy with over two trillion dollars an asset.
Speaker 1: You know when I when I look at the company
Speaker 1: and I research what they do, there really isn't an
Speaker 1: area of the investment world that a mundy doesn't touch upon.
Speaker 1: So let me ask you some some broad questions about that,
Speaker 1: starting with what are you hearing from investors today, be
Speaker 1: they US or international? What what sort of questions are
Speaker 1: investors asking. I'm going to answer that in two ways. One, Strategically,
Speaker 1: clients today are interested in working with firms where they
Speaker 1: can develop a partnership with kind of a go to
Speaker 1: asset management firm. If you have a challenge with pension
Speaker 1: funding or you're distributing through finance and advisors, and you
Speaker 1: want to work with a handful of companies that can
Speaker 1: help you solve a problem. So one, clients want to
Speaker 1: position with farms in a partnership way. Second, clients are
Speaker 1: truly interested in problem solving. We're in a persistently low
Speaker 1: right environment, So how do I seek yields on a
Speaker 1: global basis, on a local basis how do I say
Speaker 1: for retirement, how do I say for all of those
Speaker 1: longer term aspects. Clients are also wanting transparency from their
Speaker 1: asset management partners, like we're all very good as human
Speaker 1: beings of sharing very good news, but when we have
Speaker 1: bad news to share. I think that that's what this
Speaker 1: thing was is some firms from others, and we try
Speaker 1: to be extremely transparent and timely with all the information
Speaker 1: that we're sharing with clients. And more specifically, over the
Speaker 1: last few years, with the growth of e s G,
Speaker 1: whether it's internationally or here in the United States, are
Speaker 1: Elian's retail and institutional are asking many questions about e
Speaker 1: s G and net zero and climate change, and we're
Speaker 1: hoping to position ourselves as a trusted advisor with those clients.
Speaker 1: So let's talk a little bit about e s G
Speaker 1: because there's some really interesting things. First. I've been hearing
Speaker 1: for decades, literally decades, that this is the next big
Speaker 1: thing in asset management, And while it certainly has captured
Speaker 1: a lot of mind share, I don't get the sense
Speaker 1: that it's captured all that much in terms of capital flows.
Speaker 1: And you see surveys of the next generation who's gonna
Speaker 1: inherit wealth, either women as as the inheritors um from
Speaker 1: the spouse or their kids. Everybody says they like the
Speaker 1: idea of E s G investing, and everybody says they
Speaker 1: want to put their money to work that way, but
Speaker 1: it hasn't really shown up dramatically anyway in the capital flows.
Speaker 1: What are your thoughts on that? So I share similar
Speaker 1: perspectives um with you one having been in this business
Speaker 1: for a long period of time five years ago when
Speaker 1: E f G kind of really I would say in
Speaker 1: a more pronounced way, became topical. I immediately thought back
Speaker 1: to my earlier days on the institutional side, when socially
Speaker 1: responsible investing on behalf of certain endowments or charitable organizations
Speaker 1: or prevalent and many not all, many had disappointing experiences
Speaker 1: from an investment returned perspective, and they did so because
Speaker 1: some were completely eliminating. All sectors are all you know,
Speaker 1: certain financial institutions, and so that lack of exposure or
Speaker 1: that exclusionary approach created certain disappointing returns. So I immediately
Speaker 1: thought of that that environment that I grew up in,
Speaker 1: the big question started to say, can I have good
Speaker 1: investment performance while also pursuing a path on E S
Speaker 1: G investing, and many of those conversations, while they still exist,
Speaker 1: I do believe that what we have seen over the
Speaker 1: last few years, in particular from a US and I
Speaker 1: can comment from outside of the United States, that investing
Speaker 1: for the long term and investing your money so over
Speaker 1: the long term you you grow your wealth for retirement
Speaker 1: or saving for college. For many that is a primary
Speaker 1: concern and that will always drive from capital flows. Increasingly,
Speaker 1: what we're finding in from a fundamental investment perspective that
Speaker 1: as you consider investing in a particular company, whether it's
Speaker 1: on the equity of the death side, as you consider
Speaker 1: all risks that can be involved, cash flow risk, change
Speaker 1: of company management, investment in um you know, are in
Speaker 1: d for certain sectors. Many of the risks that we
Speaker 1: have always considered and increasingly are considering are some of
Speaker 1: those E S and G risks and environmental disaster or
Speaker 1: governance issue. So integrating those considerations into an investment process
Speaker 1: is very good risk management. Now you come to the
Speaker 1: point about kind of millennials, kind of our kids generations,
Speaker 1: and we do find and the science and the statistics
Speaker 1: support that that certain generations are very interested in doing
Speaker 1: well for the planet, investing with the purpose, investing with intentionality,
Speaker 1: and what we're experiencing and in fact in a Monday
Speaker 1: you know we're considering this ourselves, is in launching particular
Speaker 1: investment solutions that are impact oriented, so upfront, if someone
Speaker 1: is interested in net zero or de harbonizing a footprint
Speaker 1: or investing for clean water, that those investment objectives are
Speaker 1: clear and stated right up front, so that there's no confusion.
Speaker 1: We're all um eagerly anticipating and I would say welcoming
Speaker 1: further regulation and clarity for both companies and asset management
Speaker 1: firms around these definitions of terms, because there's still some
Speaker 1: great confusion that um that does exist. And we know
Speaker 1: that the change of administration with the Biden administration much
Speaker 1: you know that administration is much more friendly towards E
Speaker 1: s G investing or climate change and some regulation that's
Speaker 1: coming out from a European perspective. And this is where
Speaker 1: being based in Paris, France is of great interest to
Speaker 1: our clients in the United States, whose Europe has been
Speaker 1: forward thinking, forward looking, and well ahead of other regions
Speaker 1: when it comes to E s G investing and when
Speaker 1: our institutional clients are retail clients in the US are
Speaker 1: are interested in a conversation or a different perspective. Being
Speaker 1: based in Paris, you you get the Paris Accordy of
Speaker 1: climate change. Of all of that, it's a it's a
Speaker 1: unique glenn So you're right, there's so much talk about it.
Speaker 1: There are some pretty considerable flows on a global basis.
Speaker 1: So of our one point seven trillion euros that you mentioned,
Speaker 1: eight hundred billion euros is in kind of E s
Speaker 1: G type allocations. Almost half it's considerable. It is. Yeah,
Speaker 1: I'm not I'm not surprised by that because a it
Speaker 1: seems like Europe is far more um ahead of the
Speaker 1: curve in terms of legislation. But that almost doesn't matter,
Speaker 1: because if the generational surveys are accurate and the millennials
Speaker 1: and their ilk are really going to put their money
Speaker 1: where their mouths are, um, this is gonna happen organically anyway.
Speaker 1: There will be beyond just just using E s G
Speaker 1: as a risk factor. It appears that there's going to
Speaker 1: be a lot of money moving in that direction. It
Speaker 1: may take a couple of decades, but that's what we're
Speaker 1: likely to see. UM as money moves from the boomers
Speaker 1: to the gen X, gen y and and millennials. I
Speaker 1: agree with you. So, so let's stick with the concept
Speaker 1: of of the international perspective. UM. You mentioned UH your
Speaker 1: headquartered UH the parent companies headquartered in Paris. Generally speaking,
Speaker 1: overseas markets, be they developed or emerging, tend to be
Speaker 1: either cheaper or much cheaper UH than the U S lately.
Speaker 1: What are your thoughts about valuations globally so on a
Speaker 1: global perspective, you know, let's kind of stay at a
Speaker 1: at a top line level for a moment. You know
Speaker 1: that the pandemic and the environment that we've been in
Speaker 1: over the last eighteen to twenty months or so has
Speaker 1: uh been a positive for active management. So in the
Speaker 1: United States, States were all about active management. That's what
Speaker 1: we do. And prior to the pandemic, you saw um,
Speaker 1: you know, five or six companies in particular from the
Speaker 1: US perspective that was really driving the returns of the
Speaker 1: S and P five hundred and making it so difficult
Speaker 1: for active managers to really compete and outperform. And what
Speaker 1: the pandemic has introduced over the last many months or
Speaker 1: so is more breath across where we're seeing companies kind
Speaker 1: of contribute to the overall growth and the earning. So
Speaker 1: whether it's the stay at home boom and the things
Speaker 1: that we were buying when we weren't going into stores.
Speaker 1: Uh um. You know, the breath of the marketplace expanded,
Speaker 1: and so unlike prior to the pandemic when you had
Speaker 1: five stocks I think returning fifty five, fifty six and
Speaker 1: two thousand and nineteen, you have a broader suite. So
Speaker 1: active management and selecting those companies that are attractive in
Speaker 1: this broader breath is appropriate both on a European basis
Speaker 1: as well as from a US perspective. What we've also
Speaker 1: seen the first half of the year to kind of
Speaker 1: the second half of the year is that there was
Speaker 1: great enthusiasm about the economy's reopening in the United States
Speaker 1: and in Europe. The emerging markets a little bit further
Speaker 1: behind because the pace by which vaccinations were occurring was
Speaker 1: less behind than in the developed markets as we know,
Speaker 1: and then all of a sudden, the delta variant kind
Speaker 1: of started to pop up, and the exuberance and May
Speaker 1: and Junes started to fall a little bit away. Um.
Speaker 1: In the months of kind of July and August and
Speaker 1: September as we've been experienced over the last several months
Speaker 1: or so. So what we do expect on a global
Speaker 1: basis is what we are seeing is a bit of
Speaker 1: a reflation in the United States as a result of
Speaker 1: more vaccinations, UM kind of a wider market contribution, and
Speaker 1: we have the whole growth to value rotation which we
Speaker 1: started to see earlier in the year slowed down a
Speaker 1: little bit, but our view is that we are going
Speaker 1: to see a bit more of that growth to value
Speaker 1: rotation and that happened to support more positive views from
Speaker 1: a European perspective, given the underlying economy and some of
Speaker 1: the company so growth to value rotation UM the positivity rates.
Speaker 1: I was in Paris most recently and I was super
Speaker 1: impressed with how the pandemic, the vaccinations, the mass getting,
Speaker 1: the walking about was really administered um there. And I
Speaker 1: think that the economies are really quickly rebounding as well.
Speaker 1: So in this environment and we are positive on equities,
Speaker 1: we have to be careful evaluations, active management and selecting
Speaker 1: those companies that are at an appropriate valuation that can
Speaker 1: benefit from this psycho of where we are in. We're
Speaker 1: still quite positive on over the long term, and it's
Speaker 1: worth mentioning. In the beginning of the vaccine rollout, the
Speaker 1: US was one of the fastest countries um UH top
Speaker 1: three in terms of getting vaccinations out there, but over
Speaker 1: the past six months, the US has fallen behind. I
Speaker 1: think we're something like thirty seven now UM with a
Speaker 1: total vaccination rate of fifty and an eligible vaccination rate
Speaker 1: of about sixty. Europe far ahead of so a lot
Speaker 1: of countries at how is that playing out in terms
Speaker 1: of their economy? Is their reopening going appreciably better than
Speaker 1: some of the faltering we're seeing here in the US
Speaker 1: where we're along the Gulf coast in South Dakota and Idaho,
Speaker 1: the hospitals are overwhelmed again. So we probably will all
Speaker 1: agree that going back to full lockdowns is not something
Speaker 1: that we went anticipation, and so learning to live with
Speaker 1: the variant and getting vaccination rates up is really critically important.
Speaker 1: And again, what I could experience when I was traveling
Speaker 1: a week or so ago, you know, the lines for
Speaker 1: the museums and the lovely little outdoor coffee shops and
Speaker 1: just kind of walking about. Everyone is walking about, but
Speaker 1: there continue to be pretty you know, pretty clear guidelines.
Speaker 1: You've got to show your vaccination path to get into
Speaker 1: museums or buildings and department stores. You know, you you
Speaker 1: can go certain places and do certain things, and people
Speaker 1: are all kind of masking up. So I do find
Speaker 1: that they are much more serious. Again, I was only
Speaker 1: in Paris that they are much more serious. And as
Speaker 1: we know, in certain states in the United States. I'm
Speaker 1: sitting here in Boston. You know, we're one of the
Speaker 1: top three Massachusetts one of the top three or five
Speaker 1: states in the country in the way of vaccination rate,
Speaker 1: and just this morning, most recently, you know, the overall
Speaker 1: kind of infection rate has fallen again below two percent.
Speaker 1: So we're on the right trajectory. It's in some of
Speaker 1: these states, as you suggest, where the hospitalizations and the
Speaker 1: access to good health care is becoming problematic again. And
Speaker 1: those states that are more aggressive and getting their population vaccinated,
Speaker 1: are their economies kind of work and try to get
Speaker 1: back to a bit of a normal lifestyle. Yeah, we're
Speaker 1: recording this on a Tuesday. I have a dinner in
Speaker 1: the city tonight with about a dozen people. And the
Speaker 1: only reason I'm comfortable going to that dinner or for
Speaker 1: a giant two thousand person conference I went to two
Speaker 1: weeks ago. Is that New York City and New York
Speaker 1: State both require proof of vaccination, uh for entry. Now,
Speaker 1: that's not a guarantee, but at least I feel like
Speaker 1: I'm not exposing myself to people who may be behaving recklessly.
Speaker 1: If at this stage of the you know where here
Speaker 1: we are, it's practically the fourth quarter of one. If
Speaker 1: you're not vaccinated by now, I have to assume that
Speaker 1: the rest of your daily behavior is not exactly risk averse,
Speaker 1: and I don't want to be exposed to you. Forget
Speaker 1: the politics. I'm concerned about the economic impact of those
Speaker 1: folks and what it means for local businesses. Yeah, you know,
Speaker 1: the science is pretty clear, and I understand their skepticism
Speaker 1: for some around vaccinations, but my gosh, you know, where
Speaker 1: an investment managers. So we have health care analysts coming
Speaker 1: in here all the time, we have physicians given us updates.
Speaker 1: The science is pretty clear on the safety and the
Speaker 1: eck of efficacy of the vaccine. So what gives people comfort?
Speaker 1: And I think New York is doing a brilliant job
Speaker 1: of my doatalism Brooklyn, so I experienced the same you know,
Speaker 1: knowing that when you're going into a place and you're
Speaker 1: surrounded by people that are vaccinated. While nothing is a
Speaker 1: it just allows you to feel more safe. Right are
Speaker 1: You're putting the odds in your UM side. So so
Speaker 1: let's let's move beyond UM the local economy and vaccination.
Speaker 1: And I want to stick with the international theme and
Speaker 1: ask you a couple of questions. UM about China and
Speaker 1: is one of the biggest emerging markets there are. They're
Speaker 1: the second largest economy in the world. A lot of
Speaker 1: investors have been perplexed by their actions towards some of
Speaker 1: their largest companies and best known tech companies. What should
Speaker 1: investors make about this new crackdown coming from the world's
Speaker 1: second largest economy. So I'm gonna have multiple personality when
Speaker 1: I answer this question. It's there is no simple answers,
Speaker 1: so feel free to You know, our listeners appreciate nuance,
Speaker 1: so feel free to to be internally contradictory. So, on
Speaker 1: the one hand, we know that geopolitical risk is something
Speaker 1: that we have lived with and we will continue to
Speaker 1: live with, and that the strain between US and China
Speaker 1: relations is evident, and the crackdowns and the controls are
Speaker 1: present UH with with our with A Monday being based
Speaker 1: in Paris, being European and not necessarily having the same
Speaker 1: temperature between you know, a US and a China relations.
Speaker 1: Investing in China and growing our business in China is
Speaker 1: of strategic importance for the organization and A Monday was
Speaker 1: selected as I believe one of the first, maybe the
Speaker 1: first foreign asset management firms to enter into UH you know,
Speaker 1: a joint venture with the Bank of China and to
Speaker 1: help kind of grow that business in that presence of
Speaker 1: professional money management for Chinese investors. So it is something
Speaker 1: that we have to watch, you know, from a portfolio
Speaker 1: construction perspective UM and portfolio management perspective, the US and
Speaker 1: most of our assets under management are US source or
Speaker 1: US equities, US fixed income. However, we do manage global
Speaker 1: equity portfolio as we manage global high nel portfolios that
Speaker 1: can invest in some of these markets. We tend to
Speaker 1: be more large cap, not as speculative UM, and we
Speaker 1: always remain cautious when we don't have a clear understanding
Speaker 1: of earnings or accounting principles and practices. So it's it's
Speaker 1: one of those risks that will be with us for
Speaker 1: a long period of time for some institutional investors, because
Speaker 1: we have these conversations all the time. UM. Allocating to
Speaker 1: the we to China in particular is both of tactical
Speaker 1: as well as strategic long term importance, and we're happy
Speaker 1: to have those conversations. What what sort of questions are
Speaker 1: you getting from clients about cryptocurrencies? Does your institutional demands, um,
Speaker 1: are you seeing that from clients for for cryptos? I
Speaker 1: keep hearing from a lot of people who are crypto curious.
Speaker 1: It's probed be the best phrase I've heard for that,
Speaker 1: crypto crazy. Maybe. Yeah. I mean it's easy for us
Speaker 1: because we don't offer it, we don't get involved with it.
Speaker 1: We're not um in in the business of working with
Speaker 1: our clients on cryptocurrency. You know, the view is today
Speaker 1: that it's much too speculative for the conservative profile and um,
Speaker 1: you know and platform that we put forth to institutional
Speaker 1: clients into some of our retail clients. It's it's a
Speaker 1: bit at a crossroad of uh, you know, interesting technology innovation.
Speaker 1: Uh is it really money? Does it really have you
Speaker 1: know the same value as currencies that we know of today. Uh.
Speaker 1: So our view is clients, obviously you're talking about it,
Speaker 1: but it's not something that we are offering today with
Speaker 1: our clients, so I that doesn't surprise me. We we
Speaker 1: whenever we get the question, the challenge is always how
Speaker 1: do we custody this? How can we make sure that
Speaker 1: you're not part of the Depending on which study you
Speaker 1: see more of those people who have either lost the
Speaker 1: password or have the hard um hardware damage so they
Speaker 1: no longer can access that. That's nothing that we don't have.
Speaker 1: Nobody has a solution for that yet, although I'd imagine
Speaker 1: one would be coming eventually, most probably, and you know,
Speaker 1: we'd rather not be a market leader in that. And
Speaker 1: I think also as people talk about cryptocurrency, some automatically
Speaker 1: believe it's just bitcoin or just this. I mean there's
Speaker 1: there's multiple types of cryptocurrency, so it's not as straightforward
Speaker 1: as well. So more to come for sure. Huh, really
Speaker 1: really interesting. Let's talk a little bit about what it
Speaker 1: takes to build a diverse team. You talk about the
Speaker 1: importance of relationships and how trust is a two way
Speaker 1: street and loyalty is important. How is that a business imperative?
Speaker 1: How do those factors translate into a business environment. Well,
Speaker 1: simply if we were to take it Barry from Let's
Speaker 1: talk about portfolio management for a second. For anyone who
Speaker 1: has sat down with a portfolio manager or with your
Speaker 1: financial advisor looking to invest in a US equity portfolio,
Speaker 1: what you constantly here is the benefits of diversification, That
Speaker 1: diversification spreads out your risk. So not that I'm the
Speaker 1: first to say this, but why doesn't that then matter
Speaker 1: when it comes to the people who hire and the
Speaker 1: diversification that you have on your teams and diversification today.
Speaker 1: And I love where this whole discuss and around diversity,
Speaker 1: equity inclusion has kind of gone over the last several years.
Speaker 1: Diversification doesn't mean today solely whether I'm a man or
Speaker 1: a woman, or I'm white or a non white. You know,
Speaker 1: it's really diversification of thought, because we can get into
Speaker 1: trouble when you have group think and you're not challenging
Speaker 1: status quo. So I do believe that building a diversified
Speaker 1: team is a great way to harness intellectual curitiosity, to
Speaker 1: challenge status quo, and frankly just to look through look
Speaker 1: at the world through the lens of our shareholders and
Speaker 1: our institutional clients who aren't super diverse, and you mentioned
Speaker 1: earlier some of the data and science around this. It's
Speaker 1: been pretty clear from everybody who studied the space that
Speaker 1: the more diverse points of view you take into any
Speaker 1: sort of UH situation, the better the decision making tends
Speaker 1: to be. I would agree with that. Now, obviously you're
Speaker 1: preaching to the choir because I've grown up. I've grown
Speaker 1: up in this industry for thirty years as a woman.
Speaker 1: You know, I have the great honor of leading this organization,
Speaker 1: but I've had many experiences, like others on the car,
Speaker 1: where you walk into the room and you're the only
Speaker 1: one of your kind. However you want to define that,
Speaker 1: and how sometimes that can um silence you or it
Speaker 1: never silenced to me, by the way, but it could
Speaker 1: make it more difficult for some people to contribute and
Speaker 1: to participate in a conversation. And that's where running an
Speaker 1: organization and being more focused on inclusion, inclusion of thought,
Speaker 1: inclusion of all perspectives. In building a respectful work environment,
Speaker 1: you end up camping into all of your employees rather
Speaker 1: than just a handful of the go to employees that
Speaker 1: may stand out for one reason or another. I think
Speaker 1: there's a lot of momentum in the market. I tend
Speaker 1: to see the world with the glass half of I'm
Speaker 1: an ultimate optimist, but I like what I'm seeing where
Speaker 1: the energy is. We have a lot of work to do,
Speaker 1: but there's definitely energy and commitment around it. Right. So
Speaker 1: the upside is the overall trend moving in the right direction.
Speaker 1: And I don't want to use the word downside, but
Speaker 1: the downside protection is sort of what you alluded to
Speaker 1: earlier in terms of E s G as a risk factor.
Speaker 1: Let's let's talk about that G in companies with a
Speaker 1: broad governance, that it's not just run by an old
Speaker 1: boys network, but where there's true diversity of thought and inclusion,
Speaker 1: they tend to get into far less trouble than the
Speaker 1: sort of groupthink organizations. Is that a fair statement, Well,
Speaker 1: I'm sure there's lots of statistics to support that or
Speaker 1: to challenge that. What I what I would agree with
Speaker 1: you on, and what I would say is that by
Speaker 1: having a diverse balance of people, and in particular now
Speaker 1: I'm lending through the lens of a female of a woman,
Speaker 1: I do think that the qualifications or some of the
Speaker 1: awareness that I can bring to an organization is a
Speaker 1: bit of a balance of that. We talked about the
Speaker 1: balance of the e Q and the i Q. You know,
Speaker 1: it's really listening, it's understanding, it's a different risk profile
Speaker 1: that you can bring into It's it's thinking about some
Speaker 1: of the risks and some of the factors and lending
Speaker 1: that to a conversation. We may all end up arriving
Speaker 1: at the same decision, but at least my my view
Speaker 1: is that we would have considered many more factors when
Speaker 1: you have diversity of of thought being brought to that discussion.
Speaker 1: So what sort of advice do you give to women
Speaker 1: who are struggling to become advocates for themselves and advocates
Speaker 1: for women in the workplace, be it employment or promotion
Speaker 1: or you know, governance as as part of the member
Speaker 1: of the board or or c suite. This is a
Speaker 1: question I'm constantly asked, and I offer myself to any
Speaker 1: and all of the women in my company and you know,
Speaker 1: friends and family. I'm the mother of two daughters eight
Speaker 1: and five years old, and I try to provide them
Speaker 1: with advice that frankly, I was never given, but I
Speaker 1: had to learn on my own and what I do,
Speaker 1: what I would love to see more women do is
Speaker 1: really advocate for yourself. Don't allow decisions to take place
Speaker 1: around you, but to really sit down with management and
Speaker 1: communicate what are your career aspirations, where do you want
Speaker 1: to go and how can I help you get there
Speaker 1: and position yourself for being truly qualified for a position.
Speaker 1: There's some other scientific work that's done that when there's
Speaker 1: a job description out there in the marketplace and it says,
Speaker 1: you know, need ten years of experience, that if a
Speaker 1: woman has nine years and four months, she won't apply
Speaker 1: for that job. But if others, maybe a man has
Speaker 1: you know, seven years in nine months, you may apply
Speaker 1: for that job thinking that she's totally overqualified for it.
Speaker 1: So we've taken the practice out of Monday to be
Speaker 1: a bit more flexible with job requirements. Instead of saying,
Speaker 1: you know, ten years, maybe it's seven to ten years.
Speaker 1: Or instead of looking for a graduate degree or a
Speaker 1: be a just look for the skills and look for
Speaker 1: the requirements. Because we also want to attract from some
Speaker 1: of those urban communities and centers that may not be
Speaker 1: a natural path for financial services and asset and asset
Speaker 1: management SILL for women who are out there, network, find
Speaker 1: an advocate, find a mentor and make your career ambitions
Speaker 1: UM and the path that you want to pursue, let
Speaker 1: people know about it, and volunteer for projects and initiatives
Speaker 1: within the organization. Get involved across the organization and keep
Speaker 1: working at US. Huh really really in uh intriguing. So
Speaker 1: Amundy has made very specific efforts to improve its approach
Speaker 1: to recruiting, be it women are people of color, but
Speaker 1: generally looking for that sort of diverse background that leads
Speaker 1: to better decision making. Tell us a little bit about
Speaker 1: what Amundy is doing to UM put put their money
Speaker 1: where their mouth is. So in I would I would
Speaker 1: look back to I joined into fourteen to fifteen, and
Speaker 1: I would say, in two thousand seventeen, early two thousand
Speaker 1: and eighteen, I worked in earnest with my executive team
Speaker 1: and my head of HR to put in place uh
Speaker 1: d E and my framework for the entire organization, and
Speaker 1: we wanted to take a look at what did we
Speaker 1: need to do kind of internally in order to have
Speaker 1: success with this. And you can come back to culture one.
Speaker 1: I believe that a more diverse group is more positive culture.
Speaker 1: It's more inclusive, it's more respectful. I also know that
Speaker 1: You can't necessarily have success when something is topped down.
Speaker 1: So we needed this, this movement, if you will, this
Speaker 1: journey to be both top down and bottom up. The
Speaker 1: first thing that we did is we put all of
Speaker 1: my executive team and broader operating committees through unconscious biased training.
Speaker 1: And this was in two seventeen to eighteen. Everybody has
Speaker 1: done it, everyone is doing it. What we wanted to
Speaker 1: do was to get some grassroots effort, so we created
Speaker 1: an Ambassador program. We have to employees across the organization
Speaker 1: who fell passionately about helping us to become a better
Speaker 1: employer of people of color, or or gender or any
Speaker 1: anything else for that matter, to volunteer on the Ambassador
Speaker 1: program and they run monthly initiatives for the organization to
Speaker 1: raise awareness on l GBP two, to raise awareness on disability,
Speaker 1: to raise awareness on UM you know, Hispanic heritage months,
Speaker 1: and to bring it awareness. What we recognize is that
Speaker 1: externally this outreach. For a long time, the asset management
Speaker 1: industry has said I'd love to hire more diverse candidates.
Speaker 1: I'm just not getting their resumes, and to us into
Speaker 1: the industry, that's just no longer a good reason. We've
Speaker 1: got to figure out how do we get those resumes.
Speaker 1: So instead of recruiting just at the best and the
Speaker 1: brightest um you know, the all of the named schools,
Speaker 1: we've created partnerships with different community colleges. With some of
Speaker 1: the um you know historically Black College University Consortium that
Speaker 1: exists in and around North Carolina. We have partnered with
Speaker 1: an organization locally here in Boston called bottom Line, which
Speaker 1: develops relationships with inner city students, you know, before they're
Speaker 1: ready to graduate. So we've changed how we're reaching out
Speaker 1: into the community. We've also, as I mentioned, modified how
Speaker 1: we put together job descriptions and job requirements. And we're
Speaker 1: extremely conscious that when we have a position open and
Speaker 1: that person who is coming into the organization may be
Speaker 1: a twenty seven year old white woman or a thirty
Speaker 1: five year old African American male, that let's make sure
Speaker 1: we don't have five fifty year old white men or
Speaker 1: five fift year old white women being the people that
Speaker 1: this individual is interviewing. So they want to see a
Speaker 1: diverse organization. We've also the last thing Vary that we've
Speaker 1: done is we've really started to measure by metrics, so
Speaker 1: you can't manage what you can't measure, and we are
Speaker 1: presently women men. That's kind of consistent with where the
Speaker 1: industry is. We're non why why both of those numbers
Speaker 1: need to get higher, need to improve, and these efforts
Speaker 1: that we're putting in place is the is one of
Speaker 1: the ways that we're looking to drive some change. Quite
Speaker 1: quite fascinating. Let's let's talk a little bit about what's
Speaker 1: going on um in investment today. Despite very low rates,
Speaker 1: we continue to see huge flows into fixed income. Why
Speaker 1: is there so much demand for yield and is that
Speaker 1: going to put a cap on interest rates? So Barry,
Speaker 1: I wonder if we're seeing the demand and the flows
Speaker 1: in fixed income. Let's think about where we were almost
Speaker 1: a year ago today. So in March of that kind
Speaker 1: of March April time period, we saw such a significant
Speaker 1: sell off in the fixed income in the credit markets,
Speaker 1: you know, on securitized credit anywhere, down from twenty to
Speaker 1: thirty plus percent, though part of the flow is in
Speaker 1: the latter heart half of two thousand and twenty and
Speaker 1: then continuing to shoot twenty one. Is a bit of
Speaker 1: a rebound and a bit of an opportunity opportunistically to
Speaker 1: kind of get exposure to some of the sell off
Speaker 1: in the marketplace where fundamentals were really quite strong. It
Speaker 1: was some of these technical shifts that we were seeing
Speaker 1: in the marketplace. So investors on the fixed income side
Speaker 1: who were able to jump back into the marketplace have
Speaker 1: experienced them really attractive rates of return. What we're seeing
Speaker 1: today though, if you think about the current state of
Speaker 1: where we are, where we are with the potential for
Speaker 1: inflation UM, you know, continuing and thinking about any you know,
Speaker 1: any effects of a rising rate environment. More seeing considerable
Speaker 1: flows in the short end of the marketplace in short
Speaker 1: duration fixed income kind of ultrashort duration ext income. And
Speaker 1: we're also seeing very selectively for clients who are looking
Speaker 1: for still attractive yields looking at the agency market, the
Speaker 1: agency mortgage back security marketplace, again where active management can
Speaker 1: apply a selective approach. So, given your very heavily institutional
Speaker 1: UM client base, both here and overseas, where else do
Speaker 1: you see investors going to find yield? It's not just treasuries,
Speaker 1: corporates and tips. They're obviously looking else where Where else
Speaker 1: is that? So from a retail perspective, UM, there's attractive
Speaker 1: opportunity in you know, as we've seen closed and funds
Speaker 1: launched in the marketplace. The benefit of closed and funds,
Speaker 1: as your listeners and you probably know, is that you
Speaker 1: can apply some leverage, you know, selective live verge, so
Speaker 1: you can take a fairly low rate and with leverage
Speaker 1: achieve you know, on the tax exempt side, kind of
Speaker 1: four percent. We launched a close and fund not too
Speaker 1: long ago over the summertime that has over, uh, you know,
Speaker 1: a four percent target yield on a tax exempt basis.
Speaker 1: That's very attractive, especially during the threat of increases in
Speaker 1: personal taxes that we may all experience. Security ties credit
Speaker 1: is another place. But but from our perspective, investors don't
Speaker 1: have to only stay in fixed income to look for
Speaker 1: yield or to look for income. Multi asset portfolios, which
Speaker 1: have grown in popularity over the last many years, is
Speaker 1: a way to achieve a higher level of monthly income.
Speaker 1: Some of the multi asset funds do pay monthly income,
Speaker 1: and you can get levels that are much higher than
Speaker 1: just in a traditional short duration product or an investment
Speaker 1: grade product as well. Huh and and I just wanted
Speaker 1: to clarify your The investments are typically through separately managed
Speaker 1: accounts or they directly into mutual funds or other products
Speaker 1: like that. We're vehicle agnostic, so you know, we any rapper,
Speaker 1: any vehicle that we can put our active management into.
Speaker 1: So we offer separate account, collective investment trust, mutual funds,
Speaker 1: and then the use it's which is the sifter of
Speaker 1: the mutual fund in the international markets. M interesting. So
Speaker 1: so given your perspective from both the institutional side and
Speaker 1: the individual side over the years, how do you see
Speaker 1: asset management as having evolved? What's different in one from
Speaker 1: say two thousand and one or or when you and
Speaker 1: I were both in college, so that the lines between
Speaker 1: the distribution channels, what was on one side institutional and
Speaker 1: on one side retail and never the two show meet,
Speaker 1: those lines have completely blurred. There is an institutionalization and
Speaker 1: a professionalism of all investment management selection. So whether you
Speaker 1: have an individual account at a wealth management firm, that
Speaker 1: wealth management firm has a research department that is selecting
Speaker 1: and doing the due diligence on the investment products that
Speaker 1: they're are allowing to be kind of offered and distributed
Speaker 1: through their channels, and that level of rigor, that level
Speaker 1: of institutional due diligence is present today across all different channels.
Speaker 1: The second aspect of change over the last twenty or
Speaker 1: thirty years is with the growth of wealth, the growth
Speaker 1: of the high net worth investor, and the focus on
Speaker 1: maximizing after tax return. We have seen new vehicles come
Speaker 1: to market that in the past were only for the
Speaker 1: institutional account or only for the retail account. So keen.
Speaker 1: Twenty years ago, it was less likely for large institutional
Speaker 1: investors pension funds and the like to investor mutual funds,
Speaker 1: and it was less likely for an individual investor to
Speaker 1: access a separately managed account. So when I said that
Speaker 1: where vehicle agnostic, it's because the investor, whether it since atitutional, individual,
Speaker 1: everyone has different goals and outcomes and considerations. That the
Speaker 1: growth of multiple vehicles and the desire for an asset
Speaker 1: management firm to unwrap active management and to offer it
Speaker 1: in a manner that helps to meet the outcome and
Speaker 1: the goals of the clients, that's vastly different. And the
Speaker 1: third aspect of what is vastly different is pricing. So
Speaker 1: years ago you have front and loads that were let
Speaker 1: me speak if I can remember the seven and a
Speaker 1: quarter eight plus percent, and you now have today nine
Speaker 1: US loads into our mutual funds comes into UM an
Speaker 1: na V level, so without a front and sales charge.
Speaker 1: So pricing has also evolved in order to be appropriate
Speaker 1: for the type of investor. That's interesting. So so that's
Speaker 1: the past ten or twenty years. Let's talk about the
Speaker 1: next decade or so. Now that you're running a large
Speaker 1: group of investors and a hundred billion dollars, what are
Speaker 1: you looking at as how the industry itself might change
Speaker 1: over the next decade or two and what are you
Speaker 1: doing to anticipate that. So pricing will always be front
Speaker 1: and center for the industry on a going forward basis.
Speaker 1: We have seen margins come down, but as an industry,
Speaker 1: we still enjoy very attractive profit margins, and so we're
Speaker 1: seeing pricing pressure come down. Whether it's driven by you
Speaker 1: know zero you know zero fee e TF or where
Speaker 1: the total expense ratio is on mutual funds visa V
Speaker 1: where yields are. You know that that pressure will continue.
Speaker 1: So we have to be relevant and competitive from a
Speaker 1: pricing standpoint. We if we were to look out UM
Speaker 1: and this has happened already to a certain degree and
Speaker 1: in some parts of the world, but our industry is
Speaker 1: right for disruption, whether it is an entrant from outside
Speaker 1: of asset management who wants to come into this industry,
Speaker 1: or how technology will disrupt our business, and we have
Speaker 1: to think about how will our business be disrupted and
Speaker 1: how do we as a firm who who frankly has
Speaker 1: been running money and managing money since how do we
Speaker 1: make sure that we're not disrupted, that we remain relevant.
Speaker 1: Artificial intelligence will become a bigger part. It's already present,
Speaker 1: but it will become a bigger part of portfolio management,
Speaker 1: of trying to streamline operational efficiencies, and will also continue
Speaker 1: to experience, you know, the big getting bigger so in
Speaker 1: the marketplace over the last several weeks, whether it's here
Speaker 1: in the United States or abroad, the consolidation that we're seeing,
Speaker 1: you know, I believe will continue to occur. So the
Speaker 1: bigger going to get bigger. The small will have to
Speaker 1: be truly specialized in boutique and um offer to value
Speaker 1: in the middle is what has been squeezed and will
Speaker 1: continue to be squeezed in the future. Huh. That's really
Speaker 1: quite intriguing. So so you mentioned things that might disrupt
Speaker 1: the existing firmament of finance. What are your thoughts on apps?
Speaker 1: Like Robin Hood and that generation of millennials who seem
Speaker 1: to be there prime client base whom they've gamified investing for.
Speaker 1: So um, let's think of a couple of points in history.
Speaker 1: And and I've always learned that when we as an industry,
Speaker 1: or when media as a reporting entity starts to talk
Speaker 1: in terms of either or or versus or one or
Speaker 1: the other, that whoever is on the other side of
Speaker 1: that is quick to say, no, way, that's not happening.
Speaker 1: So if you think back in the nineteen eighties, was
Speaker 1: at the time active versus passive, load versus no load?
Speaker 1: And what we see today in in all of our
Speaker 1: own portfolios is that there is an appropriate place for passive,
Speaker 1: there is an appropriate place for active, there's an appropriate
Speaker 1: place beload, an appropriate place for no load, and I
Speaker 1: would suggest that there is just as we as an
Speaker 1: asset management firm or vehicle agnostic, I think for those
Speaker 1: wealth management firms that make their services available to investors,
Speaker 1: they need to be delivery agnostic. So if a client
Speaker 1: wants to come in and sit down with me as
Speaker 1: a financial advisor, fantastic. If they to do something over
Speaker 1: an app terrific, if they want to do something over
Speaker 1: you know, some type of a different you know, uh,
Speaker 1: robin hood or or nutmeg or any of those others.
Speaker 1: Than what you're really wanting to do is to understand
Speaker 1: the client segmentation that's most attracted to that and taylor
Speaker 1: and customize your offering to that client segmentation and how
Speaker 1: they want to purchase what you're selling. So I think
Speaker 1: I think it's all relevant. You just have to figure
Speaker 1: out how to segment your offering and be appropriate on
Speaker 1: how you deliver it. So, so you mentioned the sort
Speaker 1: of tension between active and passive. You've managed to navigate
Speaker 1: that pretty well and stayed on, uh, the right side
Speaker 1: of mix between active and passive. Tell us how you
Speaker 1: managed to do that well. It is a constant battle.
Speaker 1: And uh, you know, one of the recent statistics that
Speaker 1: I saw this might be you know, maybe a few
Speaker 1: months older, so, but seven of the last ten years
Speaker 1: actively managed mutual funds have been in net outflows at
Speaker 1: the expense of kind of index and passive investing. And
Speaker 1: as a you know, as as we've talked about you
Speaker 1: and I earlier and before, when you take a look
Speaker 1: at where the concentration in the market has been in
Speaker 1: two thousand and nineteen where you saw UM such a
Speaker 1: strong concentration of where the momentum was coming from. Really again,
Speaker 1: and those five or six stocks that were returning some
Speaker 1: fifty to sixty percent and their overall return. When you're
Speaker 1: an active manager and the returns are so heavily skewed
Speaker 1: in just a handful of stocks, you're gonna underperform. You're
Speaker 1: not gonna because you're diversified. You know, you're you're looking
Speaker 1: to put your conviction across UM, you know, multiple, multiple,
Speaker 1: the different names. Today, when we're seeing more breasts and
Speaker 1: what the market is delivering, we really believe that this
Speaker 1: is an opportunity for active management to contribute. Part of
Speaker 1: the other way that we've tried to fight this, Uh,
Speaker 1: you know this, this headwind of remaining actively managed is
Speaker 1: pricing is a key part of it. When you think
Speaker 1: about how the tenure of some of the mutual funds
Speaker 1: that are offered in the United States, and in particular
Speaker 1: for some firms who have been in business for decades
Speaker 1: like we have at a Monday US, the pricing for
Speaker 1: those mutual phones were created thirty years ago when interest
Speaker 1: rates were pent, when CDs were twelve percent in your
Speaker 1: total expense ratio at that time was appropriate, and come
Speaker 1: years later when you have interest rates in the single
Speaker 1: digit and you have other attractively priced vehicles, pricing has
Speaker 1: to be keen. So we're constantly evaluating, in particular with
Speaker 1: our mutual funds, with my board of trustees, looking at
Speaker 1: the market, looking where pricing is and making the necessary
Speaker 1: decisions on reducing the pricing of our management fees and
Speaker 1: our total expense ratios in order to be more competitive,
Speaker 1: in order to have the best opportunity to achieve an
Speaker 1: attractive total return for our shareholders. I know I only
Speaker 1: have you for a few more minutes, so let's jump
Speaker 1: to our favorite questions that we ask all of our guests,
Speaker 1: starting with what are you streaming these days? Tell us
Speaker 1: what's kept you entertained uh during lockdown? Be at Netflix
Speaker 1: or Amazon or podcast or whatever. Well, thank goodness for
Speaker 1: streaming right over the last year and a half or so,
Speaker 1: so we you know the rules in the house. It's
Speaker 1: something that my husband and I will enjoy and like
Speaker 1: to watch. So it can have extreme violence or be
Speaker 1: two sup be saucy. On the other hand, so some
Speaker 1: of the um some of the streaming shows that we've watched, Uh,
Speaker 1: we completed Ozark, we just completed what is it, Nine
Speaker 1: Perfect Strangers. We've watched The Mayor of East Ham. I
Speaker 1: think we also watched as well, and we just finished
Speaker 1: Queen of the South. I don't know if you've seen
Speaker 1: some of those, but maybe you can ask some of
Speaker 1: those two here. That's A. That's an interesting list, likeright there.
Speaker 1: People are always asking that question. Uh, they want some
Speaker 1: some perspective. That's A. That's a pretty interesting list. Tell
Speaker 1: us about some of your early mentors who helped shape
Speaker 1: your career. So the early mentor that helped shape my
Speaker 1: career was when I was at mf S. She actually
Speaker 1: just retired not to long ago. It's Jerry Potts. He
Speaker 1: was the head of the bank distribution channel. He hired
Speaker 1: me at MFF and he was just a super mentor
Speaker 1: to me. He saw my strengths, He picked me up
Speaker 1: when I was down, He challenged me when I was
Speaker 1: getting too comfortable. He always had a super sense of humor,
Speaker 1: and he was always my advocate and he was someone
Speaker 1: that um that really helped me move throughout the organization.
Speaker 1: And as I've gone on in time, I would say
Speaker 1: that mentoring Um. As you achieve kind of growth in
Speaker 1: your career comes less from people, at least for me
Speaker 1: in and around my organization, and more from people that
Speaker 1: I've reached out to. Either it's other leaders and asset
Speaker 1: management firms where we're sharing certain challenges. It's kind of
Speaker 1: affinity groups that you may belong to you can kind
Speaker 1: of share some of your challenges. But to me, that
Speaker 1: mentoring in your first ten or fifteen years of your
Speaker 1: career is super important. So shout out to Mr Jerry Pots.
Speaker 1: What are some of your favorite books? What are you
Speaker 1: reading right now? So? I didn't I haven't opened it yet,
Speaker 1: but I did UM order recently. UM the new Chris
Speaker 1: Wallace book The Countdown Bin Laden Um. That one is
Speaker 1: something that I want to pick up. And then a
Speaker 1: very quick read. I got together with a group of
Speaker 1: high school and junior high school friends not too long ago,
Speaker 1: and one of my friends gave each and every one
Speaker 1: of us a book by Charlie McAfee I think is
Speaker 1: his last name. It's called The Boy, the Mole, the
Speaker 1: Fox and the Horse. You literally can read it in
Speaker 1: if it takes you longer than fifteen minutes, you've you know,
Speaker 1: you've daydreamed. It's a quick read, but it is so
Speaker 1: uplifting about um, hope and generosity and year and it
Speaker 1: was one of those great little field book feel good
Speaker 1: books in the middle of a pandemic. I've given it
Speaker 1: to my girls, and I've given it to a couple
Speaker 1: of other other friends as well, so that those are
Speaker 1: a couple that just come to come to mind. Barry,
Speaker 1: very very intriguing. What sort of advice would you give
Speaker 1: to a recent college grad who was interested in a
Speaker 1: career in either investment or financial management. One. I would
Speaker 1: say it is a fantastic career path that is professionally
Speaker 1: an intellectually rewarding where you surround yourself with smart, capable,
Speaker 1: engaging people. So I think it's a It's just a
Speaker 1: terrific career path. Start networking before you graduate, so use
Speaker 1: your college alumni networks, use linked in. Linked In. I mean,
Speaker 1: it sounds so basic, but I'm surprised of how many
Speaker 1: don't use it. And let's not forget the art of handwriting.
Speaker 1: We're all getting, especially in this day and environment, phone
Speaker 1: calls have gotten away, but we're getting hundreds and hundreds
Speaker 1: of emails. Uh, it's okay to drop a handwritten note
Speaker 1: and be persistent. Part of what an employer wants to
Speaker 1: see is your ability to have tenacity and overcome objections.
Speaker 1: So if after one, two or three tries you're not
Speaker 1: getting a response, don't just walk away. Keep going at it,
Speaker 1: figure out a different way to get in front of
Speaker 1: the company that you're interested in, and left. But not least,
Speaker 1: and this should be in the wheelhouse of the young,
Speaker 1: the young colleagues who are coming out of college. Do
Speaker 1: your due diligence and research on a company ever reason
Speaker 1: is available online. Please don't come and sit down with
Speaker 1: me and say you know how many assets under management
Speaker 1: do you have? Or how many countries are you in?
Speaker 1: Like the understand the company me that you're talking to,
Speaker 1: good good advice to say the very least. And our
Speaker 1: final question, what do you know about the world of
Speaker 1: investment management today that you wish you knew thirty years
Speaker 1: or so ago when you were first getting started. So
Speaker 1: I wish today what is so clear to me only
Speaker 1: by trial and error. And I would say, broadly from
Speaker 1: a career perspective, it's okay to take risks. You're either
Speaker 1: going to fail and you'll learn from it or taking
Speaker 1: the risk will be rewarded. And at the time I
Speaker 1: didn't realize risks. I may have been taking changing jobs,
Speaker 1: changing companies, changing profiles, um. But I think taking a
Speaker 1: risk is really important and and that's more career advice
Speaker 1: that I would offer from a world of investing perspective.
Speaker 1: Is you know, thirty years ago the market was pretty
Speaker 1: domestic and not as global or as connected geo politically,
Speaker 1: or as multinational and um. Whether it was something I
Speaker 1: wish I knew thirty years ago or thought about, or
Speaker 1: maybe we just needed to all evolve over time, but
Speaker 1: today thinking beyond your borders is super important, really really fascinating.
Speaker 1: Thank you Lisa Jones for being so generous with your time.
Speaker 1: If you enjoy this conversation, well, be sure to check
Speaker 1: out any of the six prior discussions we've had. You
Speaker 1: can find those at iTunes, Spotify, all the usual podcast places.
Speaker 1: We love your comments, feedback and suggestions. You can write
Speaker 1: to us at M I B Podcast at Bloomberg dot net.
Speaker 1: Sign up from my daily reads at Rid Halts dot com.
Speaker 1: Check out my weekly column at Bloomberg dot com slash Opinion.
Speaker 1: Follow me on Twitter at rid Halts. I would be
Speaker 1: remiss if I did not thank our team that helps
Speaker 1: put together this conversation each week. Mohammed is my audio engineer.
Speaker 1: Michael Batnick is my head of research. Paris Wold is
Speaker 1: my booker slash producer. Atika Valbron is my project manager.
Speaker 1: I'm Barry Rehults. You've been listening to Master's in Business
Speaker 1: on Bloomberg Radio