Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: Since becoming CEO of Man Group, you've grown the firm's
Speaker 2: assets to about one hundred and seventy five billion.
Speaker 3: I believe what is your strategy to grow that from here?
Speaker 2: And how do you differentiate the firm in a very
Speaker 2: competitive environment for investor dollars?
Speaker 1: Thank you for having me. Good morning everyone. So this
Speaker 1: is a time when I think the alternative investment management
Speaker 1: space has everything to play for. It's a time when
Speaker 1: clients need us more. It's a time when we're coming
Speaker 1: out of this rather benign environment where you had, as
Speaker 1: asset holders, everything just held onto it and you'd be fine.
Speaker 1: We're now in states of volatility and dispersion, and so
Speaker 1: how do you grow? How do you service your clients
Speaker 1: when you're in you sure you're relevant to them, You
Speaker 1: know that they need more from you. The more diversified
Speaker 1: the content you have, the better for them, the more
Speaker 1: you're able to find solutions for them and answers for
Speaker 1: them that actually address the questions and the challenges that
Speaker 1: they are living through. And you do that by looking
Speaker 1: at your ability to have that orthogonal or uncorrelated content
Speaker 1: and capability that delivers returns to them through these different
Speaker 1: economic cycles that we're now living through. So how do
Speaker 1: you grow your assets? You listen to your clients, you
Speaker 1: make sure you're relevant to them, You grow your capabilities
Speaker 1: to deliver that to them. And it's hard work, but
Speaker 1: that's what you have to do.
Speaker 2: How important is scale and what are you hearing from
Speaker 2: them on that front?
Speaker 1: There's definitely a consolidation. There's a consolidation both at allocators
Speaker 1: but also at investment managers. That thing where you say,
Speaker 1: I need to face fewer manager who can help me
Speaker 1: do more, So that consolidation is there. So scale matters
Speaker 1: in the sense of being able to deliver all of
Speaker 1: that capability to them, and it matters in the way
Speaker 1: that you build your organization so you are able to
Speaker 1: deliver what you deliver without reducing the alpha that you've captured.
Speaker 1: So it's no good finding this very elusive thing called
Speaker 1: alpha and outperformance only to lose it through your own inefficiencies.
Speaker 1: So scale and capability you're operating platform, which might not
Speaker 1: sound the most exciting thing for us all to talk
Speaker 1: about but happens to be incredibly important. Is the thing
Speaker 1: that I think is important in that scale debate or
Speaker 1: that conversation too. So can you deliver what you have
Speaker 1: at scale efficiently and return as much ALPHA two clients
Speaker 1: as possible without losing it through your own inefficiencies?
Speaker 2: And does that mean diversification too, I mean in terms
Speaker 2: of something people are really seeking with that skilled Yeah.
Speaker 1: I think that's right. The answer for many people right
Speaker 1: now is to have a portfolio constructed in a way
Speaker 1: that navigates these ups and downs. And in some instances
Speaker 1: you're going to see there's a tendency perhaps to think
Speaker 1: of us all as trying to pitch one thing or
Speaker 1: one thing only you know, here's a fund, and you
Speaker 1: should buy my fund. I'm not sure it should work
Speaker 1: like that anymore. I think as you think about portfolios,
Speaker 1: you should think about what you're trying to achieve through time.
Speaker 1: So there's a temporal issue here, there's a cycle issue here,
Speaker 1: there's a longevity issue here, there's a scale issue here,
Speaker 1: And normally you want to think about a portfolio that
Speaker 1: does something that is capable of thinking about all of
Speaker 1: those different inflection points. So you know, I'm not a
Speaker 1: passive player, but is passive a part of a portfolio?
Speaker 1: For sure? I'm not a private equity investor. Do I
Speaker 1: think the private equity has a role to play in
Speaker 1: a portfolio? Yes, I think there are plenty of things
Speaker 1: that need to happen in between those things in the
Speaker 1: alternative investment space as well.
Speaker 2: With that in mind, what do you see happening in
Speaker 2: the environment for fees? I mean you brought up pathsive,
Speaker 2: I mean what's your outlook for margins through a bit?
Speaker 1: I think the reality is in the highly commoditized liquid spaces.
Speaker 1: I think long only equities there is definitely fee pressure
Speaker 1: in that space, but not all things are created equal.
Speaker 1: So if you are a passive player, you'll pay a
Speaker 1: certain level of fees, but if you're an active long
Speaker 1: only player, you'll have something different and there is no
Speaker 1: direction of travel there. So there's a sense that saying
Speaker 1: are all clients moving from active to passive? Answer? No,
Speaker 1: are some clients moving active passive? Yes, there are some
Speaker 1: clients and allocators moving passive to active. Absolutely. The more
Speaker 1: you go through into active or alternative investment management, the
Speaker 1: more you're trying to find and have outperformance. Clients pay
Speaker 1: for that. They also pay for and are willing to
Speaker 1: sit at the table with you as you provide them
Speaker 1: with solutions. So a shape of problem looks like this,
Speaker 1: how do we come up with something that fits that
Speaker 1: With you, that partnership of providing content that is able
Speaker 1: to fit a portfolio. I think it's more than that
Speaker 1: as well. I think clients want to work with you
Speaker 1: when you deliver more than just your investment capabilities. We're
Speaker 1: in a world where we also have a part of
Speaker 1: our business at Man Group, where we have been allocators.
Speaker 1: We have had a fun of fun business for thirty
Speaker 1: odd years. We have tools that we have used ourselves
Speaker 1: that our clients can now benefit from in portfolio construction
Speaker 1: and risk management. You're delivering much more of your organizations
Speaker 1: to your clients, and if you're not able to I
Speaker 1: think that's a challenge, and I think clients should want that.
Speaker 1: I think allocators should want to sit at the table
Speaker 1: with you, and they should ask you for more and
Speaker 1: you should be able to deliver that to them.
Speaker 2: So you brought up consolidation in the asset management space.
Speaker 3: Man does have a.
Speaker 2: History of being acquisitive, and it's well very long, more
Speaker 2: than two hundred and forty year history. Yes, yes, And
Speaker 2: last year you bought a stake at are credit firm.
Speaker 3: I do believe correct.
Speaker 2: I mean, there's a lot happening in the space. What
Speaker 2: are you, how do you see participating in it?
Speaker 3: What are you? Are you interested in buying anything else?
Speaker 1: Yes? Is the short and I guess so. Acquisitions that
Speaker 1: absolutely have been part of Man Group's history. It's something
Speaker 1: we think we do well, and we do it well
Speaker 1: because we have some very clear guidelines on how we
Speaker 1: think about it. We think about it as something that
Speaker 1: again I'm going to sound a bit like a Breaken record,
Speaker 1: but it's about having additional content and capability. It's about
Speaker 1: providing war to clients. And so when we transacted and
Speaker 1: we bought Varragan, we wanted a private credit capability. This
Speaker 1: was a business that was tremendously exciting sponsored about middle
Speaker 1: market lending in the US. It's a great point in
Speaker 1: the cycle. It's a scale of business with a tremendous
Speaker 1: culture which can benefit from the operating capabilities that we
Speaker 1: have at Man Group. You're going to find us thinking
Speaker 1: about opportunities like that, but you will also find us
Speaker 1: growing organically our business. So you know, between our private
Speaker 1: and public credit business, we're north than thirty billion dollars
Speaker 1: and you can see that that matters to clients. You
Speaker 1: know when I talk about clients all the time, because
Speaker 1: they feed both how smart we can be. You know,
Speaker 1: the danger is if you think that we can all
Speaker 1: turn up and sit at the table and come up
Speaker 1: with the singularly brilliant idea. That'd be great, and maybe
Speaker 1: we can do that from time to time. But actually
Speaker 1: the benefit is to have the brightest minds in the room,
Speaker 1: and that's between my firm and with everybody that we
Speaker 1: work for and with to come up with that nugget
Speaker 1: of brilliance. And in listening to clients and being responsive
Speaker 1: to clients, it's about growing content capability, asset class that
Speaker 1: can answer their questions and be part of answering some
Speaker 1: of the navigation points we have today. It isn't straightforward
Speaker 1: out there. So we're going to see man group will
Speaker 1: grow through organic growth through aqua hires. If we can
Speaker 1: find acquisitions that are genuinely additive to us and a
Speaker 1: creative to us and to our clients, will do that.
Speaker 1: But it's a constant thing that you need to have
Speaker 1: at the front of your mind.
Speaker 2: So as you look across your business, I mean, what
Speaker 2: products are you would you be most interested in potentially
Speaker 2: growing through acquisition.
Speaker 3: Are there gaps that you see you'd like to build or.
Speaker 1: I think that it's a great question. It's one of
Speaker 1: those ones though that suggests that somehow there's a menu
Speaker 1: from which I can choose from at any opportune time.
Speaker 1: Wouldn't that be nice? That doesn't work like that, unless
Speaker 1: if you know better, please let me know. So it
Speaker 1: is about assessing what's out there today and what's available
Speaker 1: at the right multiple, right price, with the right scale,
Speaker 1: with the right culture. What I will tell you is
Speaker 1: it won't be something that we currently do. It will
Speaker 1: be something that adds uncorrelated content or capability for us.
Speaker 1: And when I say for us, I mean for clients.
Speaker 1: So what would I be interested in looking forward to?
Speaker 1: I like credit. I think credits a cracking opportunity still
Speaker 1: out there. Can I grow it? Yes? Could I buy it?
Speaker 1: If I can find the right thing? For sure? What
Speaker 1: I won't be after in this space is something which
Speaker 1: you can't scale. I think that there are very smart
Speaker 1: people in this audience today, and very smart people sitting
Speaker 1: in my firm, and we can all get quite excited
Speaker 1: by smaller niche businesses that do really funky and fantastic things.
Speaker 1: We can all be slightly distracted by them, and it's brilliant.
Speaker 1: By the way. It's not to suggest they're not valuable,
Speaker 1: but if you can't deploy them at scale, that's less
Speaker 1: good for allocators who are trying to put money to work.
Speaker 1: It's about having discipline in this place, in this space,
Speaker 1: as much as anything else.
Speaker 2: What about man group itself as a potential target?
Speaker 1: What do you think? I think that I sit in
Speaker 1: this rarefied position of the CEO of this business and
Speaker 1: it's a cracking business. It's been around for a while
Speaker 1: you just mentioned, and my job, apart from anything, is
Speaker 1: to make sure that it is around for a lot longer.
Speaker 1: It is full of smart, capable people. We have a
Speaker 1: diversity of content that is exciting and provides answers. So
Speaker 1: my focus is less on that question and much more
Speaker 1: on how I continue to grow this business. I do
Speaker 1: not come into work every day and think, I know,
Speaker 1: is somebody going to knock on a door to day.
Speaker 1: I come into work every day and I think what
Speaker 1: can I do for my clients?
Speaker 2: So you brought up the people we've talked about, the
Speaker 2: competition for assets, how fierce are.
Speaker 3: Competition right now for talent in your business?
Speaker 1: Huge? Massive? It's always going to be that way. The
Speaker 1: competition is in every part. If you want the very
Speaker 1: best people, you have to recognize that you have to
Speaker 1: provide them with an environment and a space and an
Speaker 1: offer that makes them feel great about coming into work
Speaker 1: every day. So the competition is fierce. But actually I
Speaker 1: feel quite good about Man's positioning. So from a discretional
Speaker 1: fundamental investing perspective, you know, do the platforms have you
Speaker 1: an attention of war, of a tug of war of
Speaker 1: great capability? Absolutely? But are the things that make it different?
Speaker 1: Is this just about money at the end of the day. Listen,
Speaker 1: we work in financial services. There's a value proposition here
Speaker 1: that everybody lives with. But I would wager that most
Speaker 1: people in this audience, if not everybody could go and
Speaker 1: get another job tomorrow. Maybe they could go and get
Speaker 1: a slight increase in their comp tomorrow, But most people
Speaker 1: in this audience will also think about the culture they
Speaker 1: want to live in, the value set they're alongside, whether
Speaker 1: they can grow their capability in their business. If you're
Speaker 1: an investor, whether you have sources of capital that come
Speaker 1: from more than one place. You'll think about the tech
Speaker 1: that you have, the operating platform you have, the access
Speaker 1: to clients you have. You'll think about whether you want
Speaker 1: a global stage or not. In other words, this talent
Speaker 1: piece is not a binary thing either. If you're a technologist,
Speaker 1: you like dealing. My experience, we have about six hundred
Speaker 1: and fifty of them self identified technologists in some form
Speaker 1: or other quants or data scientists or models or developers.
Speaker 1: They love being and having access to the very best technology.
Speaker 1: They want to be put in a box, and they
Speaker 1: love solving real world problems and challenges. That's what we
Speaker 1: do every day when we come to work. So you're
Speaker 1: giving the brightest minds the best capability to solve real
Speaker 1: world issues that are very very hard. That's exciting. And
Speaker 1: if you do so in man group in the way
Speaker 1: that we do, which is in an open architected way.
Speaker 1: So there's this thing called GitHub. If you haven't seen it,
Speaker 1: go look it up. It's quite exciting. Technologies is get
Speaker 1: very excited about it. So GitHub is effectively like it's
Speaker 1: like one of those things where you do travelosity thing,
Speaker 1: you know, that sort of you assess whether something's been
Speaker 1: good or not, and you get stars and ratings by
Speaker 1: how much you've shared in this open architected world. And
Speaker 1: the GitHub rating for man Group is ridiculously high for
Speaker 1: an asset manager. I mean it's higher than most investment banks.
Speaker 1: That's because our developers are out there in that community,
Speaker 1: in an open architected space, getting access to the smartest
Speaker 1: minds to fix real problems. So it's a long winded
Speaker 1: way of answering a question, which is is the competition
Speaker 1: fears for talent? Yes? But is there are really the
Speaker 1: exciting opportunity set in there where if you want to
Speaker 1: attract the brightest and the best and retain them and
Speaker 1: inspire them because we need them to do our job
Speaker 1: every day, you can do that.
Speaker 2: So you brought up technology, and obviously Man has a
Speaker 2: long history and it's very much known for its technology.
Speaker 2: I mean, how are you thinking ab about AI both
Speaker 2: changing the investment industry right now and specifically Man going forward?
Speaker 1: So AI we sort of started to talk about it
Speaker 1: like it's a brand new thing, haven't we. It's just
Speaker 1: not a brand new thing. There's a bit offer at
Speaker 1: Man Group at the moment, whether it's ten to fifteen
Speaker 1: years that we've been using AI. So not you chat GPT.
Speaker 1: That's a newish thing we have now man GPT. That's
Speaker 1: very you can tell who may be named that with
Speaker 1: those technologies aren't necessarily good at exciting new names anyway,
Speaker 1: So man GPT, and we use any advanced tech chnology.
Speaker 1: But we've been using machine learning. We have this a
Speaker 1: relationship and have had a long relationship with Oxford University
Speaker 1: Oxford Man Institute, where we've been at the forefront of
Speaker 1: machine learning and AI. More generally, we use NLP, we
Speaker 1: use large language models. We are looking at lots of
Speaker 1: efficiency that come out of this generative AI space. You'll
Speaker 1: hear about copiloting. Let's be clear, when you have copiloting,
Speaker 1: you effectively allow the AI to help you develop your coding.
Speaker 1: Right our pick up level or probably about twenty percent
Speaker 1: of that that's suggested in the copilot coding. Okay, just
Speaker 1: by wherever reference point? Does it help you combine nonlinear
Speaker 1: signals more quickly and more effectively than you've been able
Speaker 1: to before? Yeah? Does it allow you to have smarter
Speaker 1: sentiment analysis? Absolutely? Do we have robotics through our operations functions?
Speaker 1: Uh huh, Yeah. I can give you any number of
Speaker 1: different use cases of how we deploy this technology, all
Speaker 1: away from actually the other stuff we do, which is
Speaker 1: looking at data signals, looking at TICK capability, looking at
Speaker 1: the ability to find alpha a new markets or more
Speaker 1: opportunities in that space. What I'm telling you, though, is
Speaker 1: not making investment decision.
Speaker 3: What are its limitations? From your stain.
Speaker 1: Point, there are a few of them, right, I mean,
Speaker 1: let's know. The wonderful thing about having six one hundred
Speaker 1: and fifty plus technologists and thirty five years of heritage
Speaker 1: in this space is you have really skilled people who
Speaker 1: know both the capabilities of these tools and also know
Speaker 1: the limitations, and that's incredibly important. You've probably heard of hallucination,
Speaker 1: and in this context, not in the context you might
Speaker 1: have heard of it in a desert, but within this
Speaker 1: context too. So the interesting thing about generative AI is
Speaker 1: it wants to please you. It's a bit like a puppy,
Speaker 1: you know, if you would throw it a stick, it
Speaker 1: goes and collects the stick and it comes back so
Speaker 1: and then you say, but this is the wrong stick,
Speaker 1: and it goes, okay, I'll go and find you another
Speaker 1: stick and goes against you another stick, and they say, no,
Speaker 1: it's still wrong stick. Off it goes again. It does that,
Speaker 1: so it fills gaps for you. I suppose the way
Speaker 1: I think about it is this that there are tremendous
Speaker 1: skills and capabilities in technology that have been developed for
Speaker 1: other industries. You have the most extraordinary neurosurgeons out there
Speaker 1: using these most skilled tools now which reduce the margins
Speaker 1: of error. However good that technology in that capability is
Speaker 1: you still do not want me operating on you? I
Speaker 1: would suggest that would be a bad outcome for you
Speaker 1: and probably for me. The skill of these tools is
Speaker 1: to be able to put them in the hands of
Speaker 1: people who understand them, who can use them and understand
Speaker 1: their limitations. So are we excited by new tools every
Speaker 1: day of the week? Will there be a next one?
Speaker 1: You know, a new one next year and the year after,
Speaker 1: and will we adop them for sure? Do I have
Speaker 1: high confidence in the people that I have sitting at
Speaker 1: man group who know how to use them for the
Speaker 1: benefit of our clients and know when to stop using
Speaker 1: them because they no longer provide benefit every day?
Speaker 2: So as you think about your at work, and this
Speaker 2: is our last question here, I know we're running ot.
Speaker 3: Of time for next year.
Speaker 2: Yeah, what are what are the biggest risks to the
Speaker 2: upside and the downside From your perspective.
Speaker 1: I think that I think it's it's again, it's that
Speaker 1: it's a fabulous question that makes me sound like I
Speaker 1: can predict a market, which none of us have been
Speaker 1: able to do across the entire market, across the entire space.
Speaker 1: I suppose what I think is more important is that
Speaker 1: we are looking down the lens of a space where
Speaker 1: we've had a lot of speculative issues this year. We
Speaker 1: have a little bit more certainty next year. So you know,
Speaker 1: half the world's population went to the Western world went
Speaker 1: to the polls this year. We had this tiny election
Speaker 1: in November, tiny tiny. You know, we've got still some
Speaker 1: major conflicts raging. As we look through to twenty five,
Speaker 1: maybe we have some more certainty, we have more clarity
Speaker 1: about what policy might come through. You've certainly have some
Speaker 1: You certainly had some planning that's been set out most
Speaker 1: recently in the US, which is going to be instructive.
Speaker 1: But to suggest I know where the market's going to go,
Speaker 1: can't do that for you can tell you it's all
Speaker 1: of our jobs to ensure that we are prepared to
Speaker 1: navigate what we see coming forward, and for me and
Speaker 1: for Man Group, it's about ensuring that we do our
Speaker 1: very best job to return outperformance to our clients through
Speaker 1: whatever the market cycles bring