Lisa Jones on Investing With a Purpose (Podcast)

They're one of the top ten asset managers. They're they're just immense. Uh. Lisa Jones division is over a hundred billion dollars and she really has a unique perspective on the asset management business. She has worked at a number of places um usually uh switching jobs because her from was required or she was offered a bigger job at a at another shop. So she's been at places like Eaton Vans and Pioneer Funds and and Morgan Stanley and MFS.

So she knows all there is to know about all three parts of the industry, the what some people call client facing, back office and and middle part of the office, which is the actual asset management. She's uniquely qualified to discuss what's going on in the industry, where it's been and where it's likely to to end up. I found the conversation to be absolutely fascinating, and I think you will also so, with no further ado, my conversation with a Mundy US is CEO Lisa Jones. This is Mesters

in Business with very Renaults on Bluebird Radio. My extra special guest this week is Lisa Jones. She is the CEO of A Monday US, the hundred billion dollar our u S arm of Europe's second largest asset manager, A Monday. A Monday proper manages over to trillion dollars in assets. They're one of the ten largest asset managers in the world, with over a hundred million clients in thirty six countries, about forty hundred employees. Lisa Jones, Welcome to Bloomberg. Thanks Berry,

Thanks for having me here today. My pleasure. I've been looking forward to chatting with you for a while. I think of A Monday as as really one of the largest asset managers that a lot of people, especially in the US, haven't heard of. But before we get to a Monday. Let's talk a little bit about your early career experience. You come out of Trinity College with the bachelor's in economics and you started MFS Investment Management. Tell us a little bit about your early experiences in the industry.

So you know, I've been working for thirty years, so when you say tell me about your early experiences, sure we don't go on for so long. But actually, prior to m f S, I started working at ef Hutton.

For those of your listeners who remember EF Hutton, Trinity is in Hartford, and at that point in time, you went to New York or you went to Boston, and I was from Boston, so I wanted to take a shot at working in New York City, and I started working for E. F. Hutton and worked there for a few years, really worked there through the Crisis of nineteen eight you know, the stock market crash um in the late nineteen eighties, and started in customer service of EF

Hutton for those brokerage accounts where shareholders wanted to call and ask questions and get some answers. It was a great introduction into being in a client facing role. And so from there I went to work at MFS in Boston. I joined MFS in I joined MFS as a whole salor covering the bank channel. The territory was the northeast and back then in the bank channel, the northeast was

really mained down to Virginia. And it was in the early days there beyond bank trust departments, banks were beginning to have licensed investment professionals sit in their lobbies to offer alternatives to banking customers. And that was my first experience working at MFS as a wholesaler. I then, as the time went on, began to become in house more in a management role and assume responsibility for running the

bank channel at MFS. And keep in mind, as we think about the world of investing today and talking about low interest rates, this is a period of time when CDs were double digit, UH treasuries were double digit and so it was quite a different vin erment for selling investment products in yields of that at that point in time. So is that MFEST for a total of sixteen or so years years I'll suspend some time on the institutional side running the global institutional business for at that time.

So so let's talk a little bit about that global institutional business. Eventually you end up as global head of distribution at Morgan Stanley's what enabled you to climb to the top of that ladder? And how different is institutional and distribution from what people typically think of as individual investments. So today I would say that those lines between the

two groups are blurring. But let's go back to the point in time of when I transition from what we would call the kind of retailer the distribution side, to the institutional side, being responsible for running the bank channel. At that time, I was engaged with the bank trust departments and they would be hiring external managers to offer

investment solutions to trust clients. And I began working very closely with the portfolio managers and becoming more um understanding and involved and frankly really intrigued with portfolio construction and portfolio management. And so as the business at MFS grew, the opportunity for me to transition to the institutional side

was presented to me. So I enjoyed how the pms put portfolios together, how they thought about risks, how they thought about buying cell discipline and the institutional side got me much closer to overall portfolio construction and portfolio management, and as ussset management firm began to want to go

global and enter international market. UM, my role was expanded into global head of Institutional where MFS was in multiple different markets kind of offering our investment solutions and strategies to sovereign well fund central banks, UH and pension fund investors. And so that was UH the opportunity to go from

retail to distribution when you bring those two together. UM. I then from MFS, I actually went to eat Vance to run the eat Vance Global institutional business, and I got a call out of the blue from the former

CEO of MFS when I was there, Jeff Shames. Many of your long time listeners may remember Jeff, and he had taken a role at MFM at Morgan Stanley Investment Management as an advisor, and at that time, Morgan Stanley Investment Management was looking for a new role, global Head of Distribution, which encompassed both institutional and retail distribution on

a global scale. So my experience at both MFFT any evance on the retail on the institutional side gave me the global awareness the retail in the institutional background serving multiple different types of clients and it fully wrapped up into that role at EMSUM on being global head of distribution.

So how do you make the leap from Morgan Stanley where you're really on on what I think a lot of people would perceive as an institutional sales side to a Monday in where really you're running the whole shooting match for at least for the US arm which is you know, a hundred billion dollars is still real money. Great question. So, as I've worked at different organizations, I became familiar with and really became a student of culture.

And when you have the magic of a positive culture and you can bring people together, you can create an environment where people have fun. You you treat your clients and your employees exceptionally well. And culture is a key aspect of long term success. And having observed multiple cultures across the many firms, I knew that I wanted to

be a champion of a culture. And it is easier when you have influence over the entire organization rather than when you have only influence over the distribution side, institutional or retail. And in two thousand and fourteen, prior to being known as a Monday, the firm was Pioneer Investments, and Pioneer Investment has been just I mean, you know

Pioneer right. We've been in the market since nine, launched one of America's first mutual funds, and having worked in and around the Boston community in the asset management space for a long time, always had tremendous respect for Pioneer Investments.

Knew some of the employees that were working at Pioneer Investment, some of them have worked for me at other organizations, and Pioneer was looking for a us CEO and wanted the profile of the us CEO to be someone that comes from a client facing background, and so the opportunity

for me was one. It was a profile that I had, but number two because I knew that I had great experience and bressed across multiple firms, working across an organization, and the value I believe that I brought to the firm you know at the time and hopefully fill today as you talked to my employees, is an appreciation for culture and appreciation of working together and in particular for my investment team, having worked at such broad based asset

management firms in the way of investment offerings and product in essence, I have been out of teams that have launched, sold, retained, defended, closed all types of investment strategies across multiple market cycles, to multiple geographies and multiple channels. So while I've never had the opportunity to actually run money, all that's important around it that is really important to portfolio managers, you know, being investment lad consistency and repeatability of an investment process,

taking long term view. That was complementary to the investment team here, and fortunately I was given the opportunity to take the role in two thousand and fourteen, UH the organization at that time, very interestingly, was up for sale. It was owned by UniCredit Bank UH, a large Italian based bank, who had acquired Pioneer in the year two thousand.

So the employees at Pioneer Investors had exposure and had been familiar with going through an integration and being purchased by a European based financial institution, and in two thousand and seventeen the transaction closed with the money acquiring Pioneer Investments got it. So, so I want to stay with culture, which you've you've referenced a couple of times and asked what was it like trying to maintain that sense of corporate culture and objectives and the whole team all pulling

in the same direction. During the lockdown, during the pandemic, when everybody had to work from home and there was a lot of uncertainty as to what was going to happen next, and people were genuinely nervous. Tell us what you did to maintain that corporate culture. It's been one of the greatest challenges in learnings, I think for anyone who's in a position of leadership that we've experienced over

the West eighteen or twenty months. And if you recall in March of when we all went home to work remotely, we had put out messages that we expect to be back in the office in thirty days. So when we went remote, I didn't give it any thought other than let's stay in contact with everyone, let's continue to have our meetings. And it's thirty one to sixty to eighteen months later. Immediately you had to kind of shift stage right.

And what I ended up really bringing into the organ bringing into this kind of leadership during a COVID environment is my communication skills, and so I adapted my ability to walk the halls and be with people to putting together a series of programs on how do I remain connected and how do we be transparent and how do

we communicate? So in the first several weeks, I sent out a daily email message to the organization and it was as soon as go out for a walk and get some fresh air, or here is a final that we participated in virtually, or here's what's going on in the investment department. Are here's the news from our I T department as we've all gone remotely and people were

positively responding to those daily email messages. And as the days and weeks went on, the daily notes became too tactical and we needed to shift a bit more strategically. So I implemented both a weekly All America's conference call with everyone dialing in and it was thirty minutes because we were we were all starting to experience kind of uh burnout fatigue with the multiple zoom calls fatigue right,

And I also launched weekly coffees with Lisa. It was every Thursday from ten to ten forty five and I limited the group to eight or ten people sign up. My s watch your cat, you know one across your your keyboard, Let's listen to the kids screaming in the background, Let's talk about what it's like to work remotely, and so culture for me during that pandemic was best supported by being present in the new ways that we had to be present, and we continued that really through still

to this day. While many of us are back in the office still on a voluntary basis. My weekly calls are now every two weeks. In fact, later on today we're doing a virtual town hall. It's all employees, but we've had to adapt our communication skills that we've developed as leaders into new ways. I think it was the Washington Post that had a column to this week that workers are are putting on clothes and going back to the office only to spend all day on zoom calls.

How do you avoid those circumstances, says or are you guys going to continue UM to be a little bit hybrid where people come into the office partly and work from home partly. So we have rolled out a we're all coming back into the office on October. Our offices have been opened since June on a voluntary basis, and we're seeing more and more people come into our offices.

UM in particular Boston in Durham, North Carolina. And what we really talked about to your point is it doesn't make sense if we're all commuting an hour to come into the office to be on a zoom call. Because what we know is productivity is super good working in remote locations. So what we've tried to challenge ourselves with is that the home office remains as a place of productivity, then the physical office at sixty State Street remains the

place for collaboration. So as we go to a hybrid model, and we're asking people to come back three days a week, any three days that you want, but we're asking the department heads to make sure that you're scheduling and hosting your team meetings all on one day where you're asking all employees to come back into the office of your team so you can have that team meeting and you can have that collaboration. Because the zoom calls work when everyone is remote, it gets more challenging when some are

remote and some are sitting around a table. You you end up getting a very different meeting dynamic that is not all that productive. So we've thought about that and that's the way that we're going to try to ensure that you're not sitting all by yourself on zoom calls, because frankly, you can do that from home. Quite quite interesting.

Tell us a little bit about your role. What do you do as CEO of a Monda US so a CEO of Amunda US variant all so, I bring in Canada and Latin America as heads of those regions as well. So we have offices that I'm responsible for from Montreal, Toronto, Boston, Durham, North Carolina, Miami, Mexico City, in Santiago, Chile, so all

up and down the America's perimeter. From a US perspective, we are a full organization of all the infrastructure you would expect for a large asset management firm, portfolio management, trading,

legal compliance, i T, marketing, distribution, et cetera. So my responsibility is across all of those aspects of front, middle and back office as we distribute our investment solutions here throughout the America's but we also, if you will, export our investment capabilities outside of the America's And as a member of the Global Executive Committee of a Monday, I work very closely with the other countries and regions whose

clients are interested in US dollar denominated product. So so let's talk a little bit about UM, the global giant that is a mundy with over two trillion dollars an asset. You know when I when I look at the company and I research what they do, there really isn't an area of the investment world that a mundy doesn't touch upon. So let me ask you some some broad questions about that, starting with what are you hearing from investors today, be they US or international? What what sort of questions are

investors asking. I'm going to answer that in two ways. One, Strategically, clients today are interested in working with firms where they can develop a partnership with kind of a go to asset management firm. If you have a challenge with pension funding or you're distributing through finance and advisors, and you want to work with a handful of companies that can help you solve a problem. So one, clients want to position with farms in a partnership way. Second, clients are

truly interested in problem solving. We're in a persistently low right environment, So how do I seek yields on a global basis, on a local basis how do I say for retirement, how do I say for all of those longer term aspects. Clients are also wanting transparency from their asset management partners, like we're all very good as human beings of sharing very good news, but when we have

bad news to share. I think that that's what this thing was is some firms from others, and we try to be extremely transparent and timely with all the information

that we're sharing with clients. And more specifically, over the last few years, with the growth of e s G, whether it's internationally or here in the United States, are Elian's retail and institutional are asking many questions about e s G and net zero and climate change, and we're hoping to position ourselves as a trusted advisor with those clients. So let's talk a little bit about e s G

because there's some really interesting things. First. I've been hearing for decades, literally decades, that this is the next big thing in asset management, And while it certainly has captured a lot of mind share, I don't get the sense that it's captured all that much in terms of capital flows. And you see surveys of the next generation who's gonna inherit wealth, either women as as the inheritors um from

the spouse or their kids. Everybody says they like the idea of E s G investing, and everybody says they want to put their money to work that way, but it hasn't really shown up dramatically anyway in the capital flows. What are your thoughts on that? So I share similar perspectives um with you one having been in this business for a long period of time five years ago when E f G kind of really I would say in

a more pronounced way, became topical. I immediately thought back to my earlier days on the institutional side, when socially responsible investing on behalf of certain endowments or charitable organizations or prevalent and many not all, many had disappointing experiences from an investment returned perspective, and they did so because some were completely eliminating. All sectors are all you know, certain financial institutions, and so that lack of exposure or

that exclusionary approach created certain disappointing returns. So I immediately thought of that that environment that I grew up in, the big question started to say, can I have good investment performance while also pursuing a path on E S G investing, and many of those conversations, while they still exist, I do believe that what we have seen over the last few years, in particular from a US and I can comment from outside of the United States, that investing

for the long term and investing your money so over the long term you you grow your wealth for retirement or saving for college. For many that is a primary

concern and that will always drive from capital flows. Increasingly, what we're finding in from a fundamental investment perspective that as you consider investing in a particular company, whether it's on the equity of the death side, as you consider all risks that can be involved, cash flow risk, change of company management, investment in um you know, are in

d for certain sectors. Many of the risks that we have always considered and increasingly are considering are some of those E S and G risks and environmental disaster or governance issue. So integrating those considerations into an investment process

is very good risk management. Now you come to the point about kind of millennials, kind of our kids generations, and we do find and the science and the statistics support that that certain generations are very interested in doing well for the planet, investing with the purpose, investing with intentionality, and what we're experiencing and in fact in a Monday you know we're considering this ourselves, is in launching particular

investment solutions that are impact oriented, so upfront, if someone is interested in net zero or de harbonizing a footprint or investing for clean water, that those investment objectives are clear and stated right up front, so that there's no confusion. We're all um eagerly anticipating and I would say welcoming further regulation and clarity for both companies and asset management firms around these definitions of terms, because there's still some

great confusion that um that does exist. And we know that the change of administration with the Biden administration much you know that administration is much more friendly towards E s G investing or climate change and some regulation that's

coming out from a European perspective. And this is where being based in Paris, France is of great interest to our clients in the United States, whose Europe has been forward thinking, forward looking, and well ahead of other regions when it comes to E s G investing and when our institutional clients are retail clients in the US are are interested in a conversation or a different perspective. Being based in Paris, you you get the Paris Accordy of

climate change. Of all of that, it's a it's a unique glenn So you're right, there's so much talk about it. There are some pretty considerable flows on a global basis. So of our one point seven trillion euros that you mentioned, eight hundred billion euros is in kind of E s G type allocations. Almost half it's considerable. It is. Yeah, I'm not I'm not surprised by that because a it seems like Europe is far more um ahead of the

curve in terms of legislation. But that almost doesn't matter, because if the generational surveys are accurate and the millennials and their ilk are really going to put their money where their mouths are, um, this is gonna happen organically anyway. There will be beyond just just using E s G as a risk factor. It appears that there's going to be a lot of money moving in that direction. It may take a couple of decades, but that's what we're likely to see. UM as money moves from the boomers

to the gen X, gen y and and millennials. I agree with you. So, so let's stick with the concept of of the international perspective. UM. You mentioned UH your headquartered UH the parent companies headquartered in Paris. Generally speaking, overseas markets, be they developed or emerging, tend to be either cheaper or much cheaper UH than the U S lately. What are your thoughts about valuations globally so on a global perspective, you know, let's kind of stay at a

at a top line level for a moment. You know that the pandemic and the environment that we've been in over the last eighteen to twenty months or so has uh been a positive for active management. So in the United States, States were all about active management. That's what we do. And prior to the pandemic, you saw um, you know, five or six companies in particular from the US perspective that was really driving the returns of the S and P five hundred and making it so difficult

for active managers to really compete and outperform. And what the pandemic has introduced over the last many months or so is more breath across where we're seeing companies kind of contribute to the overall growth and the earning. So whether it's the stay at home boom and the things that we were buying when we weren't going into stores.

Uh um. You know, the breath of the marketplace expanded, and so unlike prior to the pandemic when you had five stocks I think returning fifty five, fifty six and two thousand and nineteen, you have a broader suite. So active management and selecting those companies that are attractive in this broader breath is appropriate both on a European basis

as well as from a US perspective. What we've also seen the first half of the year to kind of the second half of the year is that there was great enthusiasm about the economy's reopening in the United States and in Europe. The emerging markets a little bit further behind because the pace by which vaccinations were occurring was less behind than in the developed markets as we know, and then all of a sudden, the delta variant kind of started to pop up, and the exuberance and May

and Junes started to fall a little bit away. Um. In the months of kind of July and August and September as we've been experienced over the last several months

or so. So what we do expect on a global basis is what we are seeing is a bit of a reflation in the United States as a result of more vaccinations, UM kind of a wider market contribution, and we have the whole growth to value rotation which we started to see earlier in the year slowed down a little bit, but our view is that we are going to see a bit more of that growth to value rotation and that happened to support more positive views from

a European perspective, given the underlying economy and some of the company so growth to value rotation UM the positivity rates. I was in Paris most recently and I was super impressed with how the pandemic, the vaccinations, the mass getting, the walking about was really administered um there. And I think that the economies are really quickly rebounding as well.

So in this environment and we are positive on equities, we have to be careful evaluations, active management and selecting those companies that are at an appropriate valuation that can benefit from this psycho of where we are in. We're still quite positive on over the long term, and it's worth mentioning. In the beginning of the vaccine rollout, the US was one of the fastest countries um UH top three in terms of getting vaccinations out there, but over

the past six months, the US has fallen behind. I think we're something like thirty seven now UM with a total vaccination rate of fifty and an eligible vaccination rate of about sixty. Europe far ahead of so a lot of countries at how is that playing out in terms of their economy? Is their reopening going appreciably better than some of the faltering we're seeing here in the US where we're along the Gulf coast in South Dakota and Idaho,

the hospitals are overwhelmed again. So we probably will all agree that going back to full lockdowns is not something that we went anticipation, and so learning to live with the variant and getting vaccination rates up is really critically important. And again, what I could experience when I was traveling a week or so ago, you know, the lines for the museums and the lovely little outdoor coffee shops and

just kind of walking about. Everyone is walking about, but there continue to be pretty you know, pretty clear guidelines. You've got to show your vaccination path to get into museums or buildings and department stores. You know, you you can go certain places and do certain things, and people are all kind of masking up. So I do find that they are much more serious. Again, I was only in Paris that they are much more serious. And as we know, in certain states in the United States. I'm

sitting here in Boston. You know, we're one of the top three Massachusetts one of the top three or five states in the country in the way of vaccination rate, and just this morning, most recently, you know, the overall kind of infection rate has fallen again below two percent. So we're on the right trajectory. It's in some of these states, as you suggest, where the hospitalizations and the

access to good health care is becoming problematic again. And those states that are more aggressive and getting their population vaccinated, are their economies kind of work and try to get back to a bit of a normal lifestyle. Yeah, we're recording this on a Tuesday. I have a dinner in the city tonight with about a dozen people. And the only reason I'm comfortable going to that dinner or for a giant two thousand person conference I went to two weeks ago. Is that New York City and New York

State both require proof of vaccination, uh for entry. Now, that's not a guarantee, but at least I feel like I'm not exposing myself to people who may be behaving recklessly. If at this stage of the you know where here we are, it's practically the fourth quarter of one. If you're not vaccinated by now, I have to assume that the rest of your daily behavior is not exactly risk averse, and I don't want to be exposed to you. Forget the politics. I'm concerned about the economic impact of those

folks and what it means for local businesses. Yeah, you know, the science is pretty clear, and I understand their skepticism for some around vaccinations, but my gosh, you know, where an investment managers. So we have health care analysts coming in here all the time, we have physicians given us updates. The science is pretty clear on the safety and the eck of efficacy of the vaccine. So what gives people comfort?

And I think New York is doing a brilliant job of my doatalism Brooklyn, so I experienced the same you know, knowing that when you're going into a place and you're surrounded by people that are vaccinated. While nothing is a it just allows you to feel more safe. Right are You're putting the odds in your UM side. So so let's let's move beyond UM the local economy and vaccination. And I want to stick with the international theme and ask you a couple of questions. UM about China and

is one of the biggest emerging markets there are. They're the second largest economy in the world. A lot of investors have been perplexed by their actions towards some of their largest companies and best known tech companies. What should investors make about this new crackdown coming from the world's second largest economy. So I'm gonna have multiple personality when I answer this question. It's there is no simple answers, so feel free to You know, our listeners appreciate nuance,

so feel free to to be internally contradictory. So, on the one hand, we know that geopolitical risk is something that we have lived with and we will continue to live with, and that the strain between US and China relations is evident, and the crackdowns and the controls are present UH with with our with A Monday being based in Paris, being European and not necessarily having the same temperature between you know, a US and a China relations.

Investing in China and growing our business in China is of strategic importance for the organization and A Monday was selected as I believe one of the first, maybe the first foreign asset management firms to enter into UH you know, a joint venture with the Bank of China and to help kind of grow that business in that presence of

professional money management for Chinese investors. So it is something that we have to watch, you know, from a portfolio construction perspective UM and portfolio management perspective, the US and most of our assets under management are US source or US equities, US fixed income. However, we do manage global equity portfolio as we manage global high nel portfolios that

can invest in some of these markets. We tend to be more large cap, not as speculative UM, and we always remain cautious when we don't have a clear understanding of earnings or accounting principles and practices. So it's it's one of those risks that will be with us for a long period of time for some institutional investors, because

we have these conversations all the time. UM. Allocating to the we to China in particular is both of tactical as well as strategic long term importance, and we're happy to have those conversations. What what sort of questions are you getting from clients about cryptocurrencies? Does your institutional demands, um, are you seeing that from clients for for cryptos? I keep hearing from a lot of people who are crypto curious. It's probed be the best phrase I've heard for that,

crypto crazy. Maybe. Yeah. I mean it's easy for us because we don't offer it, we don't get involved with it. We're not um in in the business of working with our clients on cryptocurrency. You know, the view is today that it's much too speculative for the conservative profile and um, you know and platform that we put forth to institutional clients into some of our retail clients. It's it's a bit at a crossroad of uh, you know, interesting technology innovation.

Uh is it really money? Does it really have you know the same value as currencies that we know of today. Uh. So our view is clients, obviously you're talking about it, but it's not something that we are offering today with our clients, so I that doesn't surprise me. We we whenever we get the question, the challenge is always how

do we custody this? How can we make sure that you're not part of the Depending on which study you see more of those people who have either lost the password or have the hard um hardware damage so they no longer can access that. That's nothing that we don't have. Nobody has a solution for that yet, although I'd imagine one would be coming eventually, most probably, and you know, we'd rather not be a market leader in that. And I think also as people talk about cryptocurrency, some automatically

believe it's just bitcoin or just this. I mean there's there's multiple types of cryptocurrency, so it's not as straightforward as well. So more to come for sure. Huh, really really interesting. Let's talk a little bit about what it takes to build a diverse team. You talk about the importance of relationships and how trust is a two way street and loyalty is important. How is that a business imperative?

How do those factors translate into a business environment. Well, simply if we were to take it Barry from Let's talk about portfolio management for a second. For anyone who has sat down with a portfolio manager or with your financial advisor looking to invest in a US equity portfolio, what you constantly here is the benefits of diversification, That

diversification spreads out your risk. So not that I'm the first to say this, but why doesn't that then matter when it comes to the people who hire and the diversification that you have on your teams and diversification today. And I love where this whole discuss and around diversity, equity inclusion has kind of gone over the last several years. Diversification doesn't mean today solely whether I'm a man or

a woman, or I'm white or a non white. You know, it's really diversification of thought, because we can get into trouble when you have group think and you're not challenging status quo. So I do believe that building a diversified team is a great way to harness intellectual curitiosity, to challenge status quo, and frankly just to look through look at the world through the lens of our shareholders and our institutional clients who aren't super diverse, and you mentioned

earlier some of the data and science around this. It's been pretty clear from everybody who studied the space that the more diverse points of view you take into any sort of UH situation, the better the decision making tends to be. I would agree with that. Now, obviously you're preaching to the choir because I've grown up. I've grown up in this industry for thirty years as a woman.

You know, I have the great honor of leading this organization, but I've had many experiences, like others on the car, where you walk into the room and you're the only one of your kind. However you want to define that, and how sometimes that can um silence you or it never silenced to me, by the way, but it could make it more difficult for some people to contribute and

to participate in a conversation. And that's where running an organization and being more focused on inclusion, inclusion of thought, inclusion of all perspectives. In building a respectful work environment, you end up camping into all of your employees rather than just a handful of the go to employees that may stand out for one reason or another. I think

there's a lot of momentum in the market. I tend to see the world with the glass half of I'm an ultimate optimist, but I like what I'm seeing where the energy is. We have a lot of work to do, but there's definitely energy and commitment around it. Right. So the upside is the overall trend moving in the right direction. And I don't want to use the word downside, but the downside protection is sort of what you alluded to earlier in terms of E s G as a risk factor.

Let's let's talk about that G in companies with a broad governance, that it's not just run by an old boys network, but where there's true diversity of thought and inclusion, they tend to get into far less trouble than the sort of groupthink organizations. Is that a fair statement, Well, I'm sure there's lots of statistics to support that or

to challenge that. What I what I would agree with you on, and what I would say is that by having a diverse balance of people, and in particular now I'm lending through the lens of a female of a woman, I do think that the qualifications or some of the awareness that I can bring to an organization is a

bit of a balance of that. We talked about the balance of the e Q and the i Q. You know, it's really listening, it's understanding, it's a different risk profile that you can bring into It's it's thinking about some of the risks and some of the factors and lending that to a conversation. We may all end up arriving at the same decision, but at least my my view is that we would have considered many more factors when you have diversity of of thought being brought to that discussion.

So what sort of advice do you give to women who are struggling to become advocates for themselves and advocates for women in the workplace, be it employment or promotion or you know, governance as as part of the member of the board or or c suite. This is a question I'm constantly asked, and I offer myself to any and all of the women in my company and you know,

friends and family. I'm the mother of two daughters eight and five years old, and I try to provide them with advice that frankly, I was never given, but I had to learn on my own and what I do, what I would love to see more women do is

really advocate for yourself. Don't allow decisions to take place around you, but to really sit down with management and communicate what are your career aspirations, where do you want to go and how can I help you get there and position yourself for being truly qualified for a position.

There's some other scientific work that's done that when there's a job description out there in the marketplace and it says, you know, need ten years of experience, that if a woman has nine years and four months, she won't apply for that job. But if others, maybe a man has you know, seven years in nine months, you may apply for that job thinking that she's totally overqualified for it. So we've taken the practice out of Monday to be

a bit more flexible with job requirements. Instead of saying, you know, ten years, maybe it's seven to ten years. Or instead of looking for a graduate degree or a be a just look for the skills and look for

the requirements. Because we also want to attract from some of those urban communities and centers that may not be a natural path for financial services and asset and asset management SILL for women who are out there, network, find an advocate, find a mentor and make your career ambitions UM and the path that you want to pursue, let people know about it, and volunteer for projects and initiatives within the organization. Get involved across the organization and keep

working at US. Huh really really in uh intriguing. So Amundy has made very specific efforts to improve its approach to recruiting, be it women are people of color, but generally looking for that sort of diverse background that leads to better decision making. Tell us a little bit about what Amundy is doing to UM put put their money

where their mouth is. So in I would I would look back to I joined into fourteen to fifteen, and I would say, in two thousand seventeen, early two thousand and eighteen, I worked in earnest with my executive team and my head of HR to put in place uh d E and my framework for the entire organization, and we wanted to take a look at what did we need to do kind of internally in order to have success with this. And you can come back to culture one.

I believe that a more diverse group is more positive culture. It's more inclusive, it's more respectful. I also know that You can't necessarily have success when something is topped down. So we needed this, this movement, if you will, this journey to be both top down and bottom up. The first thing that we did is we put all of my executive team and broader operating committees through unconscious biased training. And this was in two seventeen to eighteen. Everybody has

done it, everyone is doing it. What we wanted to do was to get some grassroots effort, so we created

an Ambassador program. We have to employees across the organization who fell passionately about helping us to become a better employer of people of color, or or gender or any anything else for that matter, to volunteer on the Ambassador program and they run monthly initiatives for the organization to raise awareness on l GBP two, to raise awareness on disability, to raise awareness on UM you know, Hispanic heritage months, and to bring it awareness. What we recognize is that

externally this outreach. For a long time, the asset management industry has said I'd love to hire more diverse candidates. I'm just not getting their resumes, and to us into the industry, that's just no longer a good reason. We've got to figure out how do we get those resumes. So instead of recruiting just at the best and the brightest um you know, the all of the named schools,

we've created partnerships with different community colleges. With some of the um you know historically Black College University Consortium that exists in and around North Carolina. We have partnered with an organization locally here in Boston called bottom Line, which develops relationships with inner city students, you know, before they're ready to graduate. So we've changed how we're reaching out into the community. We've also, as I mentioned, modified how

we put together job descriptions and job requirements. And we're extremely conscious that when we have a position open and that person who is coming into the organization may be a twenty seven year old white woman or a thirty five year old African American male, that let's make sure we don't have five fifty year old white men or five fift year old white women being the people that this individual is interviewing. So they want to see a

diverse organization. We've also the last thing Vary that we've done is we've really started to measure by metrics, so you can't manage what you can't measure, and we are presently women men. That's kind of consistent with where the industry is. We're non why why both of those numbers need to get higher, need to improve, and these efforts that we're putting in place is the is one of the ways that we're looking to drive some change. Quite

quite fascinating. Let's let's talk a little bit about what's going on um in investment today. Despite very low rates, we continue to see huge flows into fixed income. Why is there so much demand for yield and is that going to put a cap on interest rates? So Barry, I wonder if we're seeing the demand and the flows in fixed income. Let's think about where we were almost

a year ago today. So in March of that kind of March April time period, we saw such a significant sell off in the fixed income in the credit markets, you know, on securitized credit anywhere, down from twenty to thirty plus percent, though part of the flow is in the latter heart half of two thousand and twenty and then continuing to shoot twenty one. Is a bit of a rebound and a bit of an opportunity opportunistically to kind of get exposure to some of the sell off

in the marketplace where fundamentals were really quite strong. It was some of these technical shifts that we were seeing in the marketplace. So investors on the fixed income side who were able to jump back into the marketplace have experienced them really attractive rates of return. What we're seeing today though, if you think about the current state of where we are, where we are with the potential for inflation UM, you know, continuing and thinking about any you know,

any effects of a rising rate environment. More seeing considerable flows in the short end of the marketplace in short duration fixed income kind of ultrashort duration ext income. And we're also seeing very selectively for clients who are looking for still attractive yields looking at the agency market, the agency mortgage back security marketplace, again where active management can

apply a selective approach. So, given your very heavily institutional UM client base, both here and overseas, where else do you see investors going to find yield? It's not just treasuries, corporates and tips. They're obviously looking else where Where else is that? So from a retail perspective, UM, there's attractive opportunity in you know, as we've seen closed and funds

launched in the marketplace. The benefit of closed and funds, as your listeners and you probably know, is that you can apply some leverage, you know, selective live verge, so you can take a fairly low rate and with leverage achieve you know, on the tax exempt side, kind of four percent. We launched a close and fund not too long ago over the summertime that has over, uh, you know, a four percent target yield on a tax exempt basis.

That's very attractive, especially during the threat of increases in personal taxes that we may all experience. Security ties credit is another place. But but from our perspective, investors don't have to only stay in fixed income to look for yield or to look for income. Multi asset portfolios, which have grown in popularity over the last many years, is a way to achieve a higher level of monthly income.

Some of the multi asset funds do pay monthly income, and you can get levels that are much higher than just in a traditional short duration product or an investment grade product as well. Huh and and I just wanted to clarify your The investments are typically through separately managed accounts or they directly into mutual funds or other products like that. We're vehicle agnostic, so you know, we any rapper, any vehicle that we can put our active management into.

So we offer separate account, collective investment trust, mutual funds, and then the use it's which is the sifter of the mutual fund in the international markets. M interesting. So so given your perspective from both the institutional side and the individual side over the years, how do you see

asset management as having evolved? What's different in one from say two thousand and one or or when you and I were both in college, so that the lines between the distribution channels, what was on one side institutional and on one side retail and never the two show meet, those lines have completely blurred. There is an institutionalization and

a professionalism of all investment management selection. So whether you have an individual account at a wealth management firm, that wealth management firm has a research department that is selecting and doing the due diligence on the investment products that they're are allowing to be kind of offered and distributed through their channels, and that level of rigor, that level of institutional due diligence is present today across all different channels.

The second aspect of change over the last twenty or thirty years is with the growth of wealth, the growth of the high net worth investor, and the focus on maximizing after tax return. We have seen new vehicles come to market that in the past were only for the institutional account or only for the retail account. So keen. Twenty years ago, it was less likely for large institutional investors pension funds and the like to investor mutual funds, and it was less likely for an individual investor to

access a separately managed account. So when I said that where vehicle agnostic, it's because the investor, whether it since atitutional, individual, everyone has different goals and outcomes and considerations. That the growth of multiple vehicles and the desire for an asset management firm to unwrap active management and to offer it in a manner that helps to meet the outcome and the goals of the clients, that's vastly different. And the

third aspect of what is vastly different is pricing. So years ago you have front and loads that were let me speak if I can remember the seven and a quarter eight plus percent, and you now have today nine US loads into our mutual funds comes into UM an na V level, so without a front and sales charge. So pricing has also evolved in order to be appropriate for the type of investor. That's interesting. So so that's the past ten or twenty years. Let's talk about the

next decade or so. Now that you're running a large group of investors and a hundred billion dollars, what are you looking at as how the industry itself might change over the next decade or two and what are you doing to anticipate that. So pricing will always be front and center for the industry on a going forward basis. We have seen margins come down, but as an industry, we still enjoy very attractive profit margins, and so we're

seeing pricing pressure come down. Whether it's driven by you know zero you know zero fee e TF or where the total expense ratio is on mutual funds visa V where yields are. You know that that pressure will continue. So we have to be relevant and competitive from a

pricing standpoint. We if we were to look out UM and this has happened already to a certain degree and in some parts of the world, but our industry is right for disruption, whether it is an entrant from outside of asset management who wants to come into this industry, or how technology will disrupt our business, and we have to think about how will our business be disrupted and how do we as a firm who who frankly has been running money and managing money since how do we

make sure that we're not disrupted, that we remain relevant. Artificial intelligence will become a bigger part. It's already present, but it will become a bigger part of portfolio management, of trying to streamline operational efficiencies, and will also continue to experience, you know, the big getting bigger so in the marketplace over the last several weeks, whether it's here in the United States or abroad, the consolidation that we're seeing,

you know, I believe will continue to occur. So the bigger going to get bigger. The small will have to be truly specialized in boutique and um offer to value in the middle is what has been squeezed and will continue to be squeezed in the future. Huh. That's really quite intriguing. So so you mentioned things that might disrupt the existing firmament of finance. What are your thoughts on apps?

Like Robin Hood and that generation of millennials who seem to be there prime client base whom they've gamified investing for. So um, let's think of a couple of points in history. And and I've always learned that when we as an industry, or when media as a reporting entity starts to talk in terms of either or or versus or one or the other, that whoever is on the other side of that is quick to say, no, way, that's not happening.

So if you think back in the nineteen eighties, was at the time active versus passive, load versus no load?

And what we see today in in all of our own portfolios is that there is an appropriate place for passive, there is an appropriate place for active, there's an appropriate place beload, an appropriate place for no load, and I would suggest that there is just as we as an asset management firm or vehicle agnostic, I think for those wealth management firms that make their services available to investors, they need to be delivery agnostic. So if a client wants to come in and sit down with me as

a financial advisor, fantastic. If they to do something over an app terrific, if they want to do something over you know, some type of a different you know, uh, robin hood or or nutmeg or any of those others. Than what you're really wanting to do is to understand the client segmentation that's most attracted to that and taylor and customize your offering to that client segmentation and how they want to purchase what you're selling. So I think

I think it's all relevant. You just have to figure out how to segment your offering and be appropriate on how you deliver it. So, so you mentioned the sort of tension between active and passive. You've managed to navigate that pretty well and stayed on, uh, the right side of mix between active and passive. Tell us how you managed to do that well. It is a constant battle.

And uh, you know, one of the recent statistics that I saw this might be you know, maybe a few months older, so, but seven of the last ten years actively managed mutual funds have been in net outflows at the expense of kind of index and passive investing. And as a you know, as as we've talked about you and I earlier and before, when you take a look at where the concentration in the market has been in two thousand and nineteen where you saw UM such a

strong concentration of where the momentum was coming from. Really again, and those five or six stocks that were returning some fifty to sixty percent and their overall return. When you're an active manager and the returns are so heavily skewed in just a handful of stocks, you're gonna underperform. You're not gonna because you're diversified. You know, you're you're looking to put your conviction across UM, you know, multiple, multiple,

the different names. Today, when we're seeing more breasts and what the market is delivering, we really believe that this is an opportunity for active management to contribute. Part of the other way that we've tried to fight this, Uh, you know this, this headwind of remaining actively managed is

pricing is a key part of it. When you think about how the tenure of some of the mutual funds that are offered in the United States, and in particular for some firms who have been in business for decades like we have at a Monday US, the pricing for those mutual phones were created thirty years ago when interest rates were pent, when CDs were twelve percent in your total expense ratio at that time was appropriate, and come years later when you have interest rates in the single

digit and you have other attractively priced vehicles, pricing has to be keen. So we're constantly evaluating, in particular with our mutual funds, with my board of trustees, looking at the market, looking where pricing is and making the necessary decisions on reducing the pricing of our management fees and our total expense ratios in order to be more competitive, in order to have the best opportunity to achieve an

attractive total return for our shareholders. I know I only have you for a few more minutes, so let's jump to our favorite questions that we ask all of our guests, starting with what are you streaming these days? Tell us what's kept you entertained uh during lockdown? Be at Netflix or Amazon or podcast or whatever. Well, thank goodness for streaming right over the last year and a half or so, so we you know the rules in the house. It's something that my husband and I will enjoy and like

to watch. So it can have extreme violence or be two sup be saucy. On the other hand, so some of the um some of the streaming shows that we've watched, Uh, we completed Ozark, we just completed what is it, Nine Perfect Strangers. We've watched The Mayor of East Ham. I think we also watched as well, and we just finished Queen of the South. I don't know if you've seen some of those, but maybe you can ask some of those two here. That's A. That's an interesting list, likeright there.

People are always asking that question. Uh, they want some some perspective. That's A. That's a pretty interesting list. Tell us about some of your early mentors who helped shape your career. So the early mentor that helped shape my career was when I was at mf S. She actually just retired not to long ago. It's Jerry Potts. He was the head of the bank distribution channel. He hired me at MFF and he was just a super mentor

to me. He saw my strengths, He picked me up when I was down, He challenged me when I was getting too comfortable. He always had a super sense of humor, and he was always my advocate and he was someone that um that really helped me move throughout the organization. And as I've gone on in time, I would say that mentoring Um. As you achieve kind of growth in your career comes less from people, at least for me in and around my organization, and more from people that

I've reached out to. Either it's other leaders and asset management firms where we're sharing certain challenges. It's kind of affinity groups that you may belong to you can kind of share some of your challenges. But to me, that mentoring in your first ten or fifteen years of your career is super important. So shout out to Mr Jerry Pots. What are some of your favorite books? What are you reading right now? So? I didn't I haven't opened it yet, but I did UM order recently. UM the new Chris

Wallace book The Countdown Bin Laden Um. That one is something that I want to pick up. And then a very quick read. I got together with a group of high school and junior high school friends not too long ago, and one of my friends gave each and every one of us a book by Charlie McAfee I think is his last name. It's called The Boy, the Mole, the Fox and the Horse. You literally can read it in if it takes you longer than fifteen minutes, you've you know,

you've daydreamed. It's a quick read, but it is so uplifting about um, hope and generosity and year and it was one of those great little field book feel good books in the middle of a pandemic. I've given it to my girls, and I've given it to a couple of other other friends as well, so that those are a couple that just come to come to mind. Barry, very very intriguing. What sort of advice would you give to a recent college grad who was interested in a

career in either investment or financial management. One. I would say it is a fantastic career path that is professionally an intellectually rewarding where you surround yourself with smart, capable, engaging people. So I think it's a It's just a terrific career path. Start networking before you graduate, so use your college alumni networks, use linked in. Linked In. I mean, it sounds so basic, but I'm surprised of how many don't use it. And let's not forget the art of handwriting.

We're all getting, especially in this day and environment, phone calls have gotten away, but we're getting hundreds and hundreds of emails. Uh, it's okay to drop a handwritten note and be persistent. Part of what an employer wants to see is your ability to have tenacity and overcome objections. So if after one, two or three tries you're not getting a response, don't just walk away. Keep going at it, figure out a different way to get in front of

the company that you're interested in, and left. But not least, and this should be in the wheelhouse of the young, the young colleagues who are coming out of college. Do your due diligence and research on a company ever reason is available online. Please don't come and sit down with me and say you know how many assets under management do you have? Or how many countries are you in? Like the understand the company me that you're talking to,

good good advice to say the very least. And our final question, what do you know about the world of investment management today that you wish you knew thirty years or so ago when you were first getting started. So I wish today what is so clear to me only by trial and error. And I would say, broadly from a career perspective, it's okay to take risks. You're either going to fail and you'll learn from it or taking the risk will be rewarded. And at the time I

didn't realize risks. I may have been taking changing jobs, changing companies, changing profiles, um. But I think taking a risk is really important and and that's more career advice that I would offer from a world of investing perspective. Is you know, thirty years ago the market was pretty domestic and not as global or as connected geo politically,

or as multinational and um. Whether it was something I wish I knew thirty years ago or thought about, or maybe we just needed to all evolve over time, but today thinking beyond your borders is super important, really really fascinating. Thank you Lisa Jones for being so generous with your time. If you enjoy this conversation, well, be sure to check out any of the six prior discussions we've had. You can find those at iTunes, Spotify, all the usual podcast places.

We love your comments, feedback and suggestions. You can write to us at M I B Podcast at Bloomberg dot net. Sign up from my daily reads at Rid Halts dot com. Check out my weekly column at Bloomberg dot com slash Opinion. Follow me on Twitter at rid Halts. I would be remiss if I did not thank our team that helps put together this conversation each week. Mohammed is my audio engineer. Michael Batnick is my head of research. Paris Wold is

my booker slash producer. Atika Valbron is my project manager. I'm Barry Rehults. You've been listening to Master's in Business on Bloomberg Radio