"I am definitely a bond person,” says Christine Johnson, head of fixed income at Old Mutual Global Investors. We’re having lunch at Spring restaurant in Somerset House and I am beginning to understand what Christine means when she says that as a fund manager you need to “live your job”.
She likens her personality to the investment class in which she’s carved her career: “Philosophically, I think people are either debt people or equity people. Debt people are always worrying about the downside. Equity people, I find, are always delightfully optimistic. They’ll start every year saying this is it; this is the year of rising markets... I do love that contrast but I am not an eternal optimist.”
Christine’s honesty and openness is as refreshing as the restaurant’s interior, which is flooded in natural light with high ceilings, marble and gigantic mirrors.
Fixed income hasn’t exactly been the investment flavour of the month, I say to her. “No. It hasn’t been for years,” says Christine, but adds with a hint of irony, “It just happens to be the best performing asset class.”
She admits, however, that it’s important to acknowledge the challenges, and this is exactly what she did when she took over as the head of this core investment capability. “We needed to offer clients something which provides a positive return and where markets are inefficient enough for active management to add value.” So she hired a team to invest in emerging market debt right at the point when everyone detested the asset class. It was a brave call, but one that’s worked well.
“It’s a massively under-owned asset class offering an attractive return. People forget that, if you’re a bond investor, you want to buy fixed instruments in a country that’s cutting rates. All these [emerging market] countries have positive base rates, which means they can cut, whereas the US and UK are now down against bedrock. You have got to be able to go to clients and say: I understand that you might not like this at the moment, but how about looking at something else?”
Taking charge has been something Christine has relished. “You always think ‘what would I do if I was in charge?’ And then when you finally are, it’s rather intimidating. But at the same time you think: this is it… this is my shot to create things as I think they should be.”
Modernisation is key to how Christine thinks things should be. “What a client wanted five to 10 years ago is not nearly what they are going to want in future. Of course, they’ll still want some of the same things: transparency, client service and timeliness – these are more important than ever. But the industry needs to become more customer-service orientated. Historically, we valued performance and the thinking was that, as long as the performance was there, people would come and buy it. Now it’s a lot more about helping your client understand what they’ve actually invested in.”
Driving such change involves convincing internal stakeholders. “There is a massive part of my job that’s… let’s call it ‘diplomacy’. It’s about going and doing your research to the point where someone can’t say no. You need to build your case. You have to turn up with some compelling evidence and then you need to keep going until the heads start nodding.”
Describing herself as “positively a veteran”, Christine joined Old Mutual Global Investors almost six years ago from Halbis Capital Management (formerly HSBC Halbis Partners), where she was a senior fixed income fund manager, initially focusing on sterling credit before also managing global portfolios. Prior to this she worked at Investec Asset Management, joining as a high yield credit analyst but promoted to fund manager just a year later.
Her working career, however, started in a bank, NatWest, after which she joined Royal & Sun Alliance Investment Management, a capable fund manager but with no credit analysts at all in the fold. “I left that very staged and controlled world of the bank and went to Royal & Sun, which in all reality was also very staged and controlled, but it seemed like coming out into the sunshine – all the possibilities and choice. That made me realise: ‘right this is it, this is the thing I want to do’. I don’t think anybody at school ever goes ‘when I grow up I want to be a fund manager’.”
In fact, for Christine, school was hardly defining. “I left school when I was 16 – I just wasn’t getting on with it, couldn’t really find my feet after GCSEs and I wasn’t very happy.” By the time she was 17, she had eloped to Scotland and got married.
We place our food orders, but I am intrigued and need to know more. “So were you a rebel at school?” She smiles and nods. “Yes, I had a very bright older sister who went to the same school – so, typically, I decided: she’s good, I am going to be bad.”
And her young marriage? She laughs, “Oh dear, it’s all coming out now… I met him in a nightclub in Manchester. You do the sums – I obviously shouldn’t have been there at that age. We met in April and I married him in August of the same year.”
Christine continues: “When I say it now it seems like the most ludicrous thing in the world but at the time it all seemed to make perfect sense.” She adds: “I am still married to the same person – otherwise I suppose it would have been a terrible, tragic interlude. It’s our twenty-fifth wedding anniversary this year.”
Having a lot of fun but failing miserably at starting their own business, and eventually recognising “that we had no idea what we were doing”, she and her husband decided to “give the education thing another go”. Her husband went off to study physics at Manchester University while she returned to school to do her A-levels.
“I think I am the only person who’s brought my husband to the parents’ meeting,” she laughs. “He took it very seriously.”
She went on to study economics, which she found “absolutely terrifying”, but enjoyed the really steep learning curve and says economics has given her a “question everything mentality”.
Christine started working as a credit analyst at the height of the dot-com bubble and even then she was questioning the status quo. “Dot-coms made up almost 30 per cent of the European high yield market. We would go see these companies and they’d say ‘well we don’t actually do anything at the moment but we’re going to. We are going to spend this huge amount of money that you will lend us…’ They sold you a castle in the sky.”
Her first big call as an analyst was saying to the fund manager that they should steer well clear. “I wrote him a paper on the start of the railway system in the UK – the country ended up with a railway system but none of the companies that spent the money ended up in the final version because they all went bust. For a fund manager to decide not to own 30 per cent of the index is a very big call. I was immensely fortunate that I had a manager willing to sponsor an idea like that. Thankfully, it ended up being a fantastically successful call.”
Now that the shoe is on the other foot and she is a fund manager herself, she believes all analysts should expect that their ideas will end up in the fund and that they will be held accountable. “Nothing gets you more engaged than a live trade.”
I ask her about the absence of women in fund management. “Historically, the issue of client entertainment was something of a stumbling block. It was a very ‘blokey’ environment – you know, that whole idea of doing business down at the golf club, it was difficult to find your place as a woman.
“People buy people who are like them and in the end as a fund manager you’ve got to win assets.”
Did she find it difficult? “Immensely. It’s impossible to get the tone right. If you drink and join in, you’re one of the lads, but nobody wants to trust a woman who’s seen as one of the lads with assets. You’re seen as a bit rackety. And if you don’t, you’re seen as snobbish and cold and standoffish. You can’t win.”
Thankfully, she adds, things have got better. “The world has moved on. Civilisation has changed. The lack of quite so much, let’s call it event-orientated sales, has made a big difference. You are offering things on their merits.”
Corporate entertainment aside there’s still not a lot of female blood in financial services. Christine agrees, but makes an interesting point: “What you didn’t have 20 years ago, when this model was set up, was women making enough money themselves that they would invest. The head of the household was a man, he was the main earner and in charge of the finances. Now you have a new generation of women coming through who are making their own money and who expect to be in charge of the decisions they make around it. More female clients means more female IFAs and we should see that all the way up the chain on both the buy and the sell side.”
I ask her whether her upbringing shaped her ambitions in any way. “My father was a true believer that you could be anything you wanted. He worked in a mill and came from a very poor background but ended up going to Cambridge and becoming a maths professor.
“He had this huge belief that education can take you anywhere you want to go. When we were kids, our physics books had pictures of children doing experiments. They were all boys. He would say, ‘I know they’re all boys but they could also be girls’ and he would draw over the picture giving the boys long hair (both my sister and I had long hair). So I grew up with the complete expectation that I would work, and that if you worked hard there’s no reason why you can’t achieve what you want.”
WHERE WE ATE
SPRING, SOMERSET HOUSE NEW WING, LANCASTER PLACE, LONDON WC2R 1LA
“Pretty pastel dining spot”
“I had to visit Somerset House for business so nipped into Spring for a quick bite and wasn't disappointed – so pretty, the aesthetic is just as you would expect – feminine and Spring like and the food and service were excellent.”
LADIES WHO DON’T LUNCH is a regular feature in which Maike Currie profiles a woman working in the City. All interviews are conducted at a restaurant table – as an exception, nothing is eaten within the proximity of a PC, with a plastic fork or out of a cardboard box. Maike writes about investments and money matters for Fidelity International, following a career in financial journalism. @MaikeCurrie