Leaders In Funds Management – Paul Chin – Director, Investment Research And Strategy, Jamieson Coote Bonds

What led you to pursue your career path in the first place and can you remember where and when the light bulb came on?

Of all places, while playing as a leg spinner in Victorian Premier (District) cricket, I rubbed shoulders with successful finance/investment-related types. While frequently sitting on the sidelines with my team batting, it got me thinking that this would be an interesting career option to pursue, especially considering my secondary school years straddled events such as the 1987 market crash, ‘the recession we had to have’ and subsequent financial collapses. School projects involving diversified portfolio construction also piqued my interest.

We’ve read your title, now tell us how you would describe what you ACTUALLY do to a friend at a BBQ?

Jamieson Coote Bonds (JCB) is a rapidly growing fund manager that concentrates on delivering defensive bond solutions for institutional and retail investors. We do this by actively managing securities in high grade bond space (such as government, semi-government and supranational paper) and leveraging our team’s extensive offshore skills and experiences gleaned from top tier firms.

As employee #3 and Head of Investment Research and Strategy, my role is threefold:

• to provide macro input into JCB’s investment process,
• to develop investment insights for the institutional and advisor markets,
• to act as investment strategist along with one of JCB’s co-founders, Angus Coote.

It’s a rewarding role to directly and tangibly contribute to the growth of a business, and I’m lucky to be working with the team in creating something unique and truly defensive for investors.

I also serve on investment committees as an external member, helping selected clients navigate portfolio construction issues in asset allocation and manager selection.

Finally, as a Senior Fellow of Finsia, I also serve on the Finsia Industry Council for Funds and Asset Management – providing input into the future and shape of our industry through a peak body platform.

How did you get your first position in the industry?

I had the good fortune to be selected for the Colonial Group Graduate Program, a three-year intensive program. My cohort were afforded three rotations to build a logical career path and I chose funds management, and worked closely with Colonial Investments (in Melbourne) before moving to First State (now, of course, Colonial First State) in Institutional Account Management and Reporting.

I was lucky enough during this time to be exposed to Mark Burgess (then Chief Investment Officer for First State International, latterly President and Managing Director of the Future Fund). I’ve got another bite of the cherry now (Mark serves as Chair of JCB’s Advisory Board).

You spent a number of years in the U.S. before arriving back to Melbourne in 2009 to work in Vanguard. How did the opportunity to join Jamieson Coote Bonds in Australia come about?

My seven years in the US were amazing: I was based in San Francisco and I became a portfolio manager within the Multi-Asset Client Solutions Business. Working in a truly global firm taught me a great deal about navigating complexity as well as how to deal with a myriad of investment issues in different jurisdictions. Outside of work, I was heavily involved in the Australian expatriate community (becoming the Vice President of the Australian-American Chamber of Commerce), and also taking advantage of a number of links with Silicon Valley.

I was initially hired to join Vanguard’s Retail Executive Team to lead the business responsible for research and platform relationships as well as externally representing the firm. Shortly thereafter, I joined Vanguard’s Investment Strategy Group – writing white papers on investment research, overseeing diversified fund portfolio construction, and interfacing with the retail and institutional Australasian market as a Senior Investment Strategist.

Upon leaving Vanguard, I decided I wanted to pursue a range of entrepreneurial initiatives to allow me to utilise the very diverse set of skills I had built up over my 20 years in the funds management industry. I immediately joined a number of investment committees and also consulted with international managers seeking to penetrate the Australian market. During this time, I came across Charlie Jamieson and Angus Coote as co-founders of Jamieson Coote Bonds.

I was aware of the lack of high grade bonds residing in Australian’s portfolios and I was super impressed by Charlie and Angus’ vision in seeking to remedy this, as well as their entrepreneurial drive and achievement. I joined as employee #3 to head up the Investment Strategy function, provide macro input into the investment process and provide buy-side perspectives given my funds management career.

Can you provide an overview on the strategy for Jamieson Coote Bonds in Australia?

I’m tasked to execute on the broad vision that Charlie and Angus have established. My global experiences with firms that have grown rapidly (think: ETF growth in the US and here in Australia, the success of scientific management of BGI, the array of investment and distribution capabilities of Colonial First State and Advance) help me add value and drive initiatives. This includes: investment strategy development, investment input and product innovation.

Our strategy is to continue to actively deliver quality performance in the high grade bond space: continue our alpha generating record, continue our protection in down markets with a fraction of beta and volatility required. We also intend to further penetrate and grow our reputation with advisers, institutions and high net worth investors. Being known as a provider of actively managed high grade bonds, we are continually thinking of ways to extend our investment capabilities to other solutions as well.

What are some of the main opportunities and challenges you see for the industry over the coming year?

One major theme is complacency in investment markets and unrealistic asset class expectations. Unconventional policies implemented since the financial crisis (2007-2009) to re-instil confidence and activity have undoubtedly distorted markets by fuelling traditional asset returns, moderating volatility and rewarding investors taking concentrated bets. In short, markets have been conditioned to believe returns will just be ‘ground out’ with seemingly little appreciation for risk.

Against this backdrop, I am concerned about shortcomings in broad portfolio diversification and, specifically, assets intended for ‘defence’ actually being more equity-like in times of stress. I have experienced first-hand credit crunches that beguiled markets between 2007-2009: seemingly liquid markets evaporate instantly and prices of course sink like a rock. I saw this during a work trip to the UK in the midst of the global financial crisis – seeing the despair of members in Northern Rock, and then separately later trying to trade currencies as participants held the safe haven greenback.

What do you believe are the key attributes that make a successful leader?

On reflecting on what I have seen across my career, there are a few successful leaders who have genuinely shone above others. For me, they have exhibited some commonalities:

The highest integrity – ‘whiter than white’. Combined with the highest character and values: a few genuine leaders stick out here in my mind. The ones that do have maintained ‘form’, ‘consistency’ and ‘honesty’ in words, manner and action – whether the cameras are on or not (figuratively speaking). Ken Liow and the late Carol Byrne (my BGI department head in the US) stands head above shoulders for me that exhibits these qualities – being standouts in this area.

The ability to paint a vision combined with drive and innovation. I have seen successful leaders provide clarity on the future and find opportunities where others have seen barriers. Marketing exchange traded funds to financial advisers in the early 2000s in the US was unheard of, and yet, the clear pathways to change behaviours of an entire industry were forged during this period. Lee Kranefuss – the so-called ‘Godfather’ of ETFs – was chief architect of this.

The ability to bring a team for a journey and fully engage the members for the vision. I distinctly remember the palpable excitement and pride in cutting through with messages and performance in the early days of First State (now Colonial First State). Even though I began as a recent finisher of the Colonial Graduate Program, I felt part of the team and an important contributor to the firm’s growth and success of that period – this was a function of the tangible and down-to-earth initiatives implemented by Chris Cuffe.

The ability to correctly read the play and generate real opportunities. Fresh from his US career and starting out with just a desk and a laptop, founder of the Vanguard Australia business Jeremy Duffield established the foundations for a thriving funds management business that has promoted indexing across the Australian investment landscape. I was impressed by Jeremy’s industry understanding and agility to grow a business. A true gentleman.

Who is your most influential or inspirational professional influence and why?

My first finance role saw me serve in Craig Dunn’s Colonial’s Group Strategic Development team (Craig was the former long serving Group Managing Director & CEO of AMP, and now Chairman of Stone & Chalk and professional independent director).

His clear thought, strong vision, and outstanding commercial skills really encouraged me to make the most of my own opportunities – on the Colonial Graduate Program during an exciting period of merging, performing and attracting inflows, helping establish Ascalon Capital Managers (a fund manager incubator that now continues to thrive), and relocating to the US in 2002 for over 7 years with Barclays Global Investors in a money management role.

This was an extraordinary period given: a) the tremendous momentum in investment markets and the BGI business, b) the exposure to Silicon Valley and related entrepreneurial activities, c) the inspirational and seasoned professionals I subsequently mixed with. This has all provided a springboard into the start-up value creation environment I now find myself in at Jamieson Coote Bonds – and it’s been great!

If you could give one piece of advice about developing a career within the Funds Management Industry what would it be?

Develop a personal vision of where you ultimately want to rise to, and cultivate sponsors over time by executing well and partnering with stakeholders.