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A passion for China
VIRGINIE Maisonneuve, Eastspring Investments chief investment officer, "bumped into" the asset management industry in the mid-1980s, at a time when there were few women in the business, and China was barely a blip on portfolio managers' screens.
Yet those two issues - gender diversity, and China and the emerging markets - have grown into something of a passion for her.
Her China credentials, for instance, include a Bachelor's degree in political economics from the People's University in Beijing. She also obtained a Master's degree in Mandarin Chinese from Dauphine University in Paris.
After a stint in China for France's foreign ministry after school, she got into asset management as a trainee portfolio manager at Martin Currie. She was appointed a portfolio manager within a year, and has not looked back since. "I tried when I was studying to work in various fields like finance and advertising, but I was always bored. Then in 1986/87 I bumped into asset management and thought it was fantastic. Because in this field you learn about the world all the time.
"To make the right investment you need to know finance and balance sheets, of course. But you also need to think about the connections, how the world is moving. You can never be bored; it changes every day."
Today, Ms Maisonneuve boasts roughly three decades in asset management, including over 10 years at Schroders and a host of stellar firms including State Street Research, Batterymarch and Martin Currie. Between 2008 and 2014 she was named one of the Top Women in Finance in Europe by Money Management Executive.
She joined Eastspring earlier this year, an opportunity she saw as an "alignment" of "quality factors", including the chance to be based in the area of her passion - Asia. "Being located in Asia is, in my view, a very strong plus both from an investment and personal perspective ... Seeing the world with a competitive information advantage on Asia is crucial not only to manage Asian mandates but also global mandates, and serves our clients better."
On a personal note, she has two daughters adopted from China and living in Asia was appealing for the family, she adds. It also marks a return to the starting point of her working life in China. Eastspring has operations in 10 Asian markets, and manages about US$140 billion in assets.
As a portfolio manager, Ms Maisonneuve pursues a bottom-up approach. There are a number of big themes that she expects will be pivotal to markets in the future. One is an ageing demographic; yet another is climate change and the environment. "An over-arching theme is how we move as a planet from 7.4 billion to 9.5 billion people in 2050, with rapid ageing in more mature economies, even China. Climate change needs to be looked at as a limitation to a resource. In my view this is a very big theme that will continue to develop despite the short term politics."
The emerging markets, including China, are maturing, and their investment potential has to be seen against a backdrop of continuing low interest rates and lower growth. "The larger the emerging market, the more difficult it will be to maintain growth, so of course the rate of growth will decline. As economies mature from a demographic standpoint, they will also have lower growth.
"So it's all about efficiency and innovation. The trends I really like are AI (artificial intelligence) and productivity, and disruptions from a health and technology standpoint."
The investment potential of the emerging markets is yet another theme. "The case for investors to allocate more into emerging markets is there for various reasons. EM has been through enormous adjustments and also political crises. But the beginning of the inventory cycle can be quite powerful. Beyond that it's bond by bond, stock by stock."
Meanwhile gender diversity is an issue close to her heart. Ms Maisonneuve was chair of the CFA-UK gender diversity network between 2015 and 2016. Women's representation in asset management at senior levels is poor, she says.
"You have a pyramid. At the bottom in the US and Europe, there are more women than men in finance. At the top of the pyramid at the CIO level, less than 5 per cent are women. At the base it's 53 to 54 per cent. Among portfolio managers, the numbers are also dire. Less than one in five PMs are women."
Promotion of diversity, she says, is "absolutely crucial" for corporations. One reason is that diversity helps to combat unconscious bias. Human beings tend to categorise people within seconds of an encounter, using criteria such as race and gender. "Organisations which embrace and promote diversity in the workplace create better awareness and respect for differences, as well as greater adaptability, opportunity for risk taking, innovation and ultimately productivity."
A second reason is that diversity is a strong ally against group thinking. Group thinking occurs when a highly homogeneous group fails to critically assess, criticise and evaluate alternative ideas for the sake of harmony or conformity. "Corporations today need to be fit to embrace global challenges and opportunities, and independent thinking and creativity are essential to promote performance."
She adds that research has shown that diversity at the board level leads to higher profitability and profit margins. "That's because groups that come from a diverse culture, background and ethnicity will be more provocative, challenging, generating ideas and leading to a better environment."
Women tend to leave the workplace when they have children. She advocates that companies set up a "returners" programme to ease female staff's return. "Across the world, we lose women after the second child. If you have a returners programme it actively gives them the option to return after a year or two, and helps to retain talent.
"People normally say if you take a one-year break as a portfolio manager, it's not good. But if the brain was right for 20 years, the one-year break doesn't mean the brain isn't right. Maybe it's an unconscious bias, or the industry isn't used to the flexibility. I think we can work to retain a pool of very educated and talented women." W