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Friday, 29th March 2024
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Anticipating a recovery in 2011 Back  
Sean Hawkshaw, CEO of KBC Asset Management, has seen the investment management industry transform in the past five years and the current market turmoil makes for some challenging decisions. Market risk and counterparty risk are two big issues that are being addressed by the industry while the constant stream of bad news makes it difficult to reassure clients. Hawkshaw remains optimistic about an upturn being priced in later this year and hopes that ‘the darkest hour is the one before the dawn.’
6.40 a.m. - ready to leave the house just as my four energetic children are rousing themselves to face the day ahead. At this time of the morning the journey from Castleknock to our city centre office to takes no more than 15 minutes and I am at my desk usually by 7.00 am.

The investment management industry has transformed radically in the past five years but the current global financial situation in which we find ourselves certainly is exceptional and makes for some challenging decisions.
Sean Hawkshaw


KBC Asset Management is part of the Belgian KBC Group, and though the KBC Group is not without its challenges in the current climate, its well earned reputation for conservatism has served the business well. KBC Asset Management in Ireland is a provider of innovative investment management products to pension funds, charities and corporates with a global client base.

7.00 a.m. - My day in the office begins with a review of the papers, Irish Times, Financial Times and online International Herald Tribune to keep up to speed with what’s happening in the markets and general news. A quick scan through the sports pages then we’re off…

Lots of emails to deal with from our US office which came in overnight. Some can be dealt with later when the US opens for business.

Our Asian based colleagues usually have some items that need to be addressed before they finish work. Some products we manage are distributed in Japan, Korea and Taiwan and there’s a call with the head of sales in the region, Angie Chan, to set up a roadshow to meet clients and brief them on how the portfolios are holding up in the face of the current economic climate.

I’ll normally take some time to go through reports on client meetings over the previous couple of days. Currently, as is understandable, our client servicing team are spending a lot of time with trustees and their advisors. It’s a tough role in the current environment and it’s not easy to provide reassurance when funds are down over 30 per cent and there’s still a constant stream of bad news coming through. They say the darkest hour is the one before the dawn hopefully this is the case with markets and we’ll start to see some anticipation of a recovery in 2011 being priced in as the year progresses.

8.00 - 8.15 a.m. - I have a daily morning meeting with my PA where we discuss the day and an overview of the remainder of the week ahead, any pending travel arrangements, diary entries etc.

8.30 a.m. - The ‘morning meeting’ where the KBCAM team gets together. Everybody is welcome to attend and normally about on third of our total staff of 90 will participate. The main focus is a briefing on markets, economic data released overnight and impact on portfolios. Noel O’Halloran, our CIO, gives a roundup and takes questions or comments. Given that we manage a number of different specialist strategies it’s usually the case that market events have different consequences for each of our strategies - what’s good for our Dividend Plus Strategy might be bad for our Agri Business Strategy (an overall decline in the appetite of risk for example - high dividend funds tend have a lower risk profile while agri has many emerging markets and is typically a riskier strategy than broad market equities).

9.00 a.m. - Today is the monthly Risk Committee meeting. We look at performance of various funds relative to their benchmarks and risk tolerance levels around our sectors and stocks. Market risk and counterparty risk are big issues at present and we also review the portfolios to monitor compliance with the relevant investment constraints over the period. In times of volatile markets such as these you can have ‘inadvertent breaches’ due simply to market movements and we look to see what remedial action taken is being taken to rectify. Following that we focus on operational risk and particularly any operational errors that may have arisen in the period and look for confirmation that action has been taken to ensure that the appropriate controls are strengthened and/or implemented to avoid a reoccurrence. Finally we review the compliance paper which briefs us on any compliance or regulatory matters in the various jurisdictions where we do business. Being part of a large European fund management group means we have to do a lot of reporting on risk and compliance related matters and the disciplined approach has served us well in recent times.

10.30 a.m. - My role as chairman of the Irish Association of Investment Managers involves weekly meetings with Frank O’Dwyer the Chief Executive. The IAIM, which was founded in 1986, is the representative body for institutional investment managers in Ireland. The 12 members of the Association manage assets of €260 billion on behalf of Irish and international clients. The IAIM represents the interests of members to Government, regulatory bodies and other organizations and needless to say it’s been an active and challenging time with the global problems and of course the local issues within the banking sector. While the IAIM members compete with one another on a daily basis we put this behind us when working through the association and there’s a great sense of unity and purpose in terms of addressing the external challenges.

Among the many objectives of the IAIM is the aim to promote Ireland as a centre for Fund Management. Competing with global managers on our own doorstep has forced us to raise the bar and in many instances Irish based managers are competing with the best in overseas markets. We have also seen changes within the traditional distribution model in the institutional segment with consultancy houses crossing the line to enter the fund management game and the introduction of a new concept called ‘implemented consulting’.

While there are lots of ‘big issues’ to be addressed today at our meeting we focus on training and raising skills levels within the local industry. Frank has some very practical ideas on organising training programmes - in this instance a performance measurement and risk management programme where we agree to bring a proposal to the IAIM management committee to jointly fund bringing an educational course to Dublin rather than have each of the fund management houses sending people to London. Frank twists my arm to provide a training room for the week.

12.30 p.m. - Product lunchtime briefing with staff. Once a month we host a lunchtime briefing internally where all staff attend a 30 minute update followed by a Q& A session about a particular aspect of the business which could range from a newly launched strategy outline from a member of our asset management team to a tax briefing from finance.

If you’re selling a product or a concept I think the first step should be to convince your own staff. Today our Vice President of Sustainable Investment, Steve Falci, presents on our Environmental and Sustainable Strategies giving staff an update on the level of interest and growth of these strategies across our international markets. The main crux of the discussion focuses on the stocks within our environmental portfolios and how the sell off in recent months has presented investors with an attractive entry point for an environmental strategy. Taking traditional equity markets at the moment compared to these “alternative” equities and though forecasting short term market moves are fraught with chance, investing in some of these undervalued, fundamentally sound, leading companies that are positioned to benefit from profitable long term secular trends, is a tried and true recipe for investment success. Our underlying message for these strategies is that over a three to five year horizon we are confident they will outperform the market.

1.30 p.m. - Back at the desk with time to catch up on emails, which requires ever increasing immediate action, though much of these actions are managed by my PA - I return some phone calls before attending my next meeting with the Executive Committee of KBCAM Ltd.

2 p.m. - It is our weekly Executive Committee Meeting which comprises our CIO, COO and Risk and Compliance Director. These meetings deal with all kinds of issues from strategic to the more mundane management issues. We try to focus on operational issues every alternate week. Today we joined by our Chief Economist, Eoin Fahy, to discuss our next quarterly financial review and outlook for our clients.

4.30 p.m. - Back in my office for a scheduled call with Geoff Blake who runs our New York Office. We have recently expanded our range of strategies on offer through Calvert who are one of the largest distributors and managers of sustainable investment products in the US. They appointed us to manage their Alternative Energy Fund in 2007 which was a big success and the Water Fund has recently gone live. We discuss the competitive environment and prospects for the fund as well as support requirements for a forthcoming media launch.

6 p.m. - Ready to leave the office and head home.

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