Fixed Income News Australia spoke with managing director and head of distribution for Natixis Investment Managers, Australia & New Zealand, Louise Watson about her journey in the world of finance and the state of the fixed income sector in 2021.
Please tell us a little about your background and how you found your way into finance?
As a child I watched my parents build and grow a business, which continues to this day. This ignited my curiosity to study accounting in order to understand business principles which eventually led to banking and financial markets. In my first role, I was an assistant sales trader at Hambrecht & Quist, an investment bank in San Francisco. I had to perfect the art of booking trades, getting lunch and coffee orders while I studied for the Series 7 exam so that I could be promoted to having my own account coverage.
What led you to join Natixis and how does the company make a difference to advisors/ investors?
I started my career journey in 1998 in equity capital markets however when I made the move to asset management in 2007, I found myself working closely with one of the most highly regarded fixed income teams in the market, led by Robert Mann and Ben Alexander at Credit Suisse Asset Management. With each career step, I moved further towards alternatives. Natixis not only had a great reputation as an inclusive employer but a deep bench of affiliate strategies covering alternatives, fixed income, equities and real assets. The variety and quality of strategies as well as the culture is ultimately what led me to Natixis Investment Managers.
What is demand like for fixed-income investments at the moment?
Given interest rates are very low and the continued search for yield, we are seeing strong demand for actively managed fixed income strategies. Investors are searching for strategies which can meet a higher return target, with defensive characteristics, whilst being managed within a conservative fee budget. Superannuation funds, insurers and private wealth managers are at the forefront of product innovation; they are increasingly looking for tailored fixed income solutions. We try to take a wide lens and scan the best fixed income strategies within our stable of managers to help them build flexible investment strategies which meet their member and client needs.
What are the types of alternative fixed income products that are attracting interest?
We are seeing strong interest in strategies which are highly diversified and managed by portfolio managers who are skilled at identifying pricing anomalies across many sectors. This interest is most prevalent at Loomis Sayles, where investor interest is centred around Global Credit, Securitised Credit, Bank Loans, High Yield and Global Multi Asset Credit as a way to capture the recovery across many industries and geographies including emerging markets.
Who has most influenced your career? Is there any advice you could give to those just starting out?
I had a mentor throughout each phase of my career, I remain in contact with them all and they continue to support me and assist with introductions. My team leader in my first role in the US was brutally honest about the investment banking industry and taught me how to not only survive but thrive. My mentor at JPMorgan London was and is formidable. She led a large team on a trading floor with fierce drive and the sharpest intellect I have encountered. She expected this and no less from her team. These early years gave me a strong sense of self and a foundation with the resilience to forge a long career.
My advice is threefold:
- Don’t be afraid to take risks in your career; a variety of skills become valuable layers.
- Fail fast: learn quickly, show humility from mistakes, then bounce back with a positive outlook.
- Network: find ways to reciprocate in your network and never underestimate the value of a strong network.
Looking ahead to 2021, are there any specific investment trends you’re seeing that investors should look out for? How could they find out more?
Identifying which assets and strategies will perform well in a post COVID-19 world is front of mind for 2021. We are seeing this theme stretch across fixed income asset classes:
- US securitised agency debt and securitised credit appear favourable as they have lagged the broader risk rally largely because of technical pressures, not fundamentals, leaving the sector in a good position to outperform in a continued credit rally and offering favourable carry to help absorb near term volatility.
- Global Credit and Multi Asset Credit strategies which identify changing economic regimes, with an ability to forecast market volatility and then combine this with bottom-up analysis of the capital structure for individual companies will perform strongly. These strategies provide an opportunity to shift away from equities to reduce volatility while still seeking return.
What are some of your main interests outside of work, Louise?
My main interests outside of work are spending time with family and friends. Whether it is watching our kids play sport, hosting BBQ dinners for friends and countless kids, finding a fun new restaurant with girlfriends or being an enthusiastic fielder with limited ability in my husband and son’s beach cricket games over the summer.