Why do you think asset management is a good industry for graduates to join?
For me, the major attraction of working in the industry is being able to build projects and ideas over the long term. In investment banking, you work on a transaction, finish it, and move on to the next one. Asset management is much more about working out where things are going to be, or what you think is going to make the most sense, over the next five to ten years. It's about having convictions and sticking with them, and you're encouraged to spend time thinking about things. If something isn't quite right we don't do it and if we think something is right, we do it properly, which can take years. Because we work in this long-term way, we have a strong sense of ownership over the products we work on - here you could be working with something for twenty years or more.
What have you particularly enjoyed working on during your career in asset management?
Over the past few years, it's been fascinating to work with big corporate clients with significant pension liabilities on how we can build investment products that will enable to them to overcome the challenges they'll face in meeting these obligations over the next 20 or 30 years.
We've also recently set up a fund to invest directly in UK corporates, which was the first of its kind in the UK and brought a new dimension to the corporate funding landscape. It's been interesting to work with government entities and policy organisations in connection with the new fund, and generally to work on something of significance to the UK economy as a whole.
Working in asset management, you often get to travel the world - a particular credit product that we launched in 2005 involved around 80 meetings worldwide - across Japan, Korea, elsewhere in Asia and the US.
What do you think M&G in particular can offer graduates interested in a career in asset management?
The firm is small enough that you can easily get to know and have frequent discussions with colleagues across the firm. This means we can do what I think asset managers should do - connect elements from different sources to come up with new and interesting investment ideas. On the other hand, M&G is very big in terms of assets under management, which means great access to investment opportunities and all the benefits that come with being a big name in the market.
We have a great working atmosphere and culture. We're not very hierarchical. Everyone has a high level of responsibility and we're all about allowing people to think about things, express their opinions and grow at their own pace - and the firm helps you do so.
Finally, M&G's had a very good past few years. We got through a difficult period in the financial markets without problems, which I think is testament to the care we take as an organisation over everything we do.
What kind of graduate do you think is suited to working in asset management and what are the best things for students who want to find out more about the industry to do?
As with any sector, there are different jobs here for different people. In asset management you'll find people who are marketing funds through to people doing very technical work - there is a great breadth of roles.
In my area of work in particular - actually managing funds - I think the best people are those who are endlessly curious. The best asset managers know an extraordinary amount about the areas in which they specialise. You need to be someone who arrives at an airport and thinks "How well does this airport work? Would I want to invest in it?" Or they might go into Tesco and think about how the layout of its stores drives its profits.
Any students interested in going into asset management should make sure they have an understanding of the basics of the industry, which is that we make investments because we think they'll give us a good return. Many students seem keen to discuss, say, equity derivative volatility, rather than asking whether we should invest in a company. Is it a good company? A company that's bad in some ways but cheap? Is it a risky but high-yielding investment, or a safe one? Many students, when asked why they would invest in a company, effectively say because the Investors Chronicle says it's cheap, or because the FT says we should buy into it, rather than thinking about whether they fundamentally believe it's a good investment.
Students interested in asset management might want to join a university investment club which will give them a chance to share investment ideas with other people and find out more about how investing works. Setting up a small business is also very good experience, as it'll mean you'll think about how companies get money to do what they want to do and ensure that they produce a return for their investors.
Investment Scheme graduate trainee
What made you decide to work in asset management?
I realised I wanted to do investment-focused analytical research. You can do research at an investment bank, but then you're ultimately only suggesting investment ideas to a client. I wanted to see my ideas put into action - in asset management you have much more direct input into investment decisions, can see how they turn out, and learn from your mistakes.
Also, the asset management industry is very stable in terms of job security, partly because our clients are institutional investors who understand that markets go up and down, and are prepared to take a long-term perspective when looking at the results of what we do.
Finally, the work-life balance is great - I leave at 6pm most days, earlier if I have football or basketball practice, and never work at the weekend. As long as you do your work, and are prepared to help out other people where necessary, you can arrange your time as you like. I think it's recognised in the industry that being under excessive stress means it's hard to make good investment decisions, so ensuring that people have time for their personal lives is a business necessity.
Why did you choose M&G in particular?
When I was doing my research into the industry, I liked what I heard about M&G's investment philosophies. On their website, they have some video presentations about some of the investment decisions their fund managers have made. To me, they all seemed to be things that most people would never have thought of, but seem strikingly obvious once they're explained to you. For example, Colgate is a holding on a couple of our funds. One of our fund managers discovered that in Vietnamese the word for "to brush your teeth" is "to Colgate" and realised it showed their great strategic exposure to emerging markets.
I also came here because I found everyone at M&G to be very friendly and helpful. After I received my offer, the chief executives of fixed income and equities both gave me a call to say well done. And since I've been working here, everyone's been really supportive - people are always happy to sit down with you for a chat if you need more information about their area of work. Also, employees tend to stay here for a long time, which I think reflects well on M&G.
Can you tell us some more about your role?
The M&G investment management graduate scheme is rotational, and so far I've spent time in equity research, portfolio management, property, and I'm now in fixed income.
I'll normally get in at around 8.30am and read the news, and then there's a morning meeting at 9am, where we'll get an updates on market conditions, any new potential investments and on any corporate reports that have been released recently. Some of the fund managers will then speak about any recent investments they've made, or market views they have. So you get a good idea of what everyone's doing and the direction things are going in.
After that, I'll usually have some technical reporting tasks to do - letting the fund managers know exactly how much cash they have free to invest. The fund managers might also ask me to do some analysis of some of their investment positions. They're all really open and approachable - I've sat down with most of the fund managers in my team to hear about their funds and how they operate.
I might also get the opportunity to analyse potential investments - for example, a fund manager might ask me to compare Toyota and Honda. I'll look at their annual reports, asking what their figures are like, whether one company has a competitive advantage over the other, how they're positioned in emerging markets, where they produce and sell their cars, and what their shipping costs are. I might ring up a sales person at an investment bank and ask for their opinion, or for any relevant recent reports they have. I could also ask some of the other fund managers for their opinions - they might mention big picture issues like the impact of government bailouts for carmakers in the US. Finally, I would factor in things like whether either Toyota or Honda produce cars that are popular with celebrities (like the Toyota Prius), Honda's position as the world's largest motorcycle manufacturer, and how well they're each positioned in the growing environmentally-friendly market. Once I've finished my research I might simply sit down with a fund manager and talk through my ideas, or I might be asked to turn it into a research note for the rest of the team.
What's been your best moment since joining M&G?
Just a couple of months after starting here, one of the fund managers invited me to come along to a client meeting with them and I ended up sitting opposite one of the most influential chief executives in a particular industry. As a recent graduate, it was incredible to get exposure to someone who runs a multibillion dollar company and a direct insight into their thinking.