Aoifinn Devitt: This podcast was made possible by the kind support of Alvine Capital Management, a London-based specialist investment advisor and placement boutique.
Cynthia Steer: I loved learning to take risk. I was very lucky early in my career, and this is where I think it’s just not luck. It’s having people who are your advocates, not your mentors, your advocate.
Aoifinn Devitt: I’m Aoifinn Devitt, and welcome to the 50 Faces Podcast, a podcast committed to revealing the richness and diversity of the world of investment by focusing on its people and their stories. I’m joined today by Cynthia Steer, who has had a multi-decade career in investment management, spending time as an investment director, CIO, Chief Research Strategist at a series of large consulting firms, and now with a broad range of investment committee and independent director roles. Welcome, Cynthia. Thanks for joining me today.
Cynthia Steer: Thanks, Aoifinn, for having me, and I am delighted to be here, and I think your series is marvelous.
Aoifinn Devitt: Well, we are thrilled to have you. So let’s start where we always start with your background and career journey. Where did you grow up? What did you study? And how did you come to enter the world of investing?
Cynthia Steer: So I can say truthfully, a child of the Northeast, and let me explain that. I grew up in a farm town outside of Toronto, Ontario, and my family hailed from two places in northern New England— well, not so northern, but Gloucester, Massachusetts, as they say, and Lake Winnipesaukee, New Hampshire. All of them were old-fashioned towns with deep traditions, and basically, You can group them all by saying that mothers locked the doors around 4 o’clock when you got home from school, and they did not want to see you until about 6 o’clock or 7 o’clock when dinner was had. And how did I come? I think by accident. I always wanted to do something internationally. So for me, graduate school was either a choice of law or business, and business looked more flexible. My undergraduate studies were frankly in urban studies, both the sociology and education. And I spent a couple of years teaching on the Lower East Side in New York, doing what I considered to be my military service before I went on to graduate school. So, to me, entering the world of investing was a byproduct of wanting to do something internationally.
Aoifinn Devitt: That’s so interesting because it’s actually why I ended up in corporate law as a branch of law and ultimately finance as well. So, very similar kind of instincts, I think. And you’re right, it is more flexible. Tell me a little bit about your international career then. Where did you work? And maybe across your career, what made a real impression on you location-wise?
Cynthia Steer: I was one of the people, instead of being transferred abroad, I was one of the who people chose to stay in the States and work constantly. For instance, in one job, I commuted between Paris and New York. Not shabby, frankly. But most of my jobs were based in New York. Not in Boston, from where I came, because opportunities for women were short, if not invisible, when I got out of business school. So, I spent a lot of my time on planes, as most of us did, a lot of my time talking to people overseas, and a lot of my time, in a sense, reading and getting to know people. I also traveled extensively towards the last part of my career as part of I was chair of an IMF World Bank committee that was doing technical assistance in the EMD markets in the knots before the global financial crisis. So, I spent a fair amount of my time on the road for that also.
Aoifinn Devitt: Well, I certainly do want to ask you about your career’s highs and lows, but I think before that, I’d like to just get into some of your core investment beliefs because I’ve known you as an investment strategist, a research strategist, speaking at many of the conferences we’ve shared together, and you’ve perhaps had time for those beliefs to evolve over time, but can you talk to any core investment beliefs you hold and how they’ve evolved over time?
Cynthia Steer: It’s interesting you ask that question because I don’t know that my core beliefs have ever really changed in I a— mean, to me, it’s always about people and trusting people. The act of investing in and of itself, the way we do it, is that you trust somebody with somebody else’s money. And that to me is the way I learned to look at it as a fiduciary and continue. So I guess, first of all, my core belief is that I am first and foremost a fiduciary with all that that means, both the good and the bad side. The second thing is I believe in people. I believe that people are talented. Generally of good values and sense, but I also trust and then verify. Over time, what has changed, I think, is that I rely more on quantitative analysis than when I first got into the business when quantitative analysis was not available. You could do some math and things like this, but you really just didn’t have real-time information. You had to structure your beliefs or what you were going to do and posit in a series of sort of, if this happens and this happens, then what am I going to think about this? What’s the long-term and short-term? In a sense, that actually has done me well over my career because, as you said, I’ve spent a fair amount of my time as a strategist. The last thing that I say is I believe that you cannot be a generalist. I think you can start as a generalist, but you’ve got to have some subject matter expertise. Early in my career, I was fortunate to go through a credit trading program and go back into operations, and that is not an expertise, but it’s a skillset that I value. And I also learned about foreign exchange markets and real estate. And so, those are skillsets and emerging markets. I’ve always been in the emerging markets, have been since the beginning of my career. To the end of my career. Imagine coming out of business school, getting to be the executive assistant to the head of Latin American lending, think you’ve got a really great job, and it’s 1982, 1983, and it’s the beginning of the blowup in Latin America where all things good went bad. So again, trust, verify, do your homework. And the last thing I think that has evolved is Teamwork. 4 people working together are always much more than 4. And so each person counts. Finally, I guess the last thing is every dollar counts. When you’re in the nonprofit area, I sit on 2 community foundations, and when we make extra dollars, they’ll go to a homeless shelter, they’ll go to an art museum. They’ll go to a young child who wants to become and play in a symphony. They’ll go to beautifying a school or an extra program. So extra cents counts.
Aoifinn Devitt: That’s really interesting reflections. And I think I would share your view about specialization. And I was given that advice early in my career as a young person to become a go-to person on certain areas that, that would kind of instantly get you some recognition maybe among the senior ranks. And it it was, was good advice then to lift me out of that generalist pool. It’s very interesting.
Cynthia Steer: Oh, I want to go back to that because I couldn’t agree with you more. I had a first boss. My first job was at American Express, both on the bank side and the treasury side. And I had a boss who was a strategic planner who had really come out of GE when GE strategic planning was very, very hot. And I would wait to write a note to him on the market till 8 o’clock at night, handwritten note, give him the latest in the market for the day. And you’re exactly right. For women, it was the only way to move forward.
Aoifinn Devitt: So interesting. Well, let’s talk now about perhaps the evolution of diversity in the world of investment throughout your career. You mentioned when you started in Boston, there were no roles for women. And now clearly, towards this stage of your career, there’s quite a different landscape, we would hope. Can you maybe give us your assessment of how diversity in the industry has changed and where you think it is today versus where it should be?
Cynthia Steer: Well, number one, I want to say that diversity is much better than when I started. When I started and went to Wharton, there were 15% of the class were women. Now, obviously, over 50%, as an example. I think in my training class coming out of Wharton, my credit training, I think there were maybe 3 of us out of 15. Again, sort of low numbers. In the world of investments, that’s an interesting— In the world of investments, I had a number of women fellow CIOs. Myra Drucker is one of them. Judy Maris, who most people don’t know, is another. And we all sort of came out the same time, but it was, whoa, true diversity was not to be had. And I credit a lot with my sensitivity to diversity and really trying to underwrite emerging managers over since the mid-’90s, mid to late ’90s, to Denise Napier, the former treasurer of Connecticut, who I got to know in the mid-’90s. And she just shone a light on this. Today, I think we’re doing a lot, but if you look from 2005 on, we still haven’t done enough. Yes, we have emerging manager programs, but what I would’ve expected by now is that firms would’ve been funded on the alt side, and that’s only beginning to happen. That the large firms would’ve been much more diverse than they are. Although I think that that is beginning to happen because you see it more than the junior levels, you see it at the mid-management level. The fight still is at the top, but I think we have a long way to go. That being said, the window over the last 2 years has been extraordinary. And what I’m hoping is that we have at least another 2 years with this kind of tremendous momentum to really put in place some extraordinary things.
Aoifinn Devitt: Well, let’s hope we do continue to see some of the progress being built on, but I think it’s interesting that we haven’t come as far as you maybe hoped we would come, and it’s really a head-scratcher as to why that is. If you look back at your career, as I said, the travel you’ve built into it is the stuff of envy, at least for me, because I am a passionate traveler and I think observer of other cultures and I really believe it makes us better professionals when we do that. What would you say were some of the career highs and lows over the course of your career?
Cynthia Steer: Well, to start with the travel, I must admit I love the travel. I love coming home, but I love the travel. I used to do— just to make you laugh, I’ve always been passionate about the emerging markets, but I used to do my tarmac test. What was a tarmac test? It was a level of corruption in the country. The worse the tarmac, the higher the corruption. But in terms of travel and my highs and lows, to me, I loved learning to take risk. I was very lucky early in my career, and this is where I think it’s just not luck. It’s having people who are your advocates, not your mentors. Your advocate. I had a first boss who said he’d never gone into operations and never seen sort of how the sausage is made. So he sent me for 6 months into the operational area. All my peer group thought it was horrible. I got to understand what letters of credit were, bankers’ acceptances. I got to see how a loan calculation worked. I got to see how a forward contract was calculated. And I can’t tell you how important that’s been. So, early in my career, I was able to pick up some very significant skill sets. Foreign exchange, I traded foreign exchange. In the mid-’80s, I had the opportunity to trade a billion-dollar book. You couldn’t do this any way, shape, or form today as a young trader. I also got to meet some women who were extraordinary in the foreign exchange area. Then I had added on real estate to my career. I actually had the opportunity to work for the Brofman family and learn about swaps because we were doing a very large credit transaction and the largest monetization of a real estate portfolio. So being able to have these early transactions allowed me when I got a tremendous opportunity to become the CIO of United Technologies in the early ’90s, to understand how money is invested and to take a look at managers. Along the way, as my expertise deepened, I got a lot more skill sets about judging people, and that to me also differentiated. But along the way also, comes mistakes. And the idea that you are fiduciary in that industry and an ERISA fiduciary did not only make me pause, but reared its ugly head in the sense that I had to tell management at one particular job that I felt that a particular manager was inappropriately handling the portfolio. That did not go down all that well. But it comes back to what are you doing? Who are you looking in the mirror? And it’s generally you. I would say that my last job was the most interesting from putting all my skill sets together, from managing a group that had outsourced CIO to creating a manager research platform to overseeing a trillion and a half in strategies and really trying to be able to communicate that to senior management. So I’ve been more lucky than most, but I must admit I’ve had mentors, I’ve had advocates, and along the way probably have had a little bit of common sense.
Aoifinn Devitt: Well, certainly the common sense is a key part of, of the learning in this division above all. I can’t let this conversation pass without asking you to look in the crystal ball a little, because as a strategist, you must have done this for most of your career with respect to markets and assets. But if you were to turn that crystal ball on our world of investment management, can you say how you think it will look like in 5 to 10 years? And I’m going to be greedy here and ask you to comment on things as diverse as active versus passive management, maybe diversity overall, how we’ll be approaching maybe different products. Are there any kind of key areas you think you will see change?
Cynthia Steer: That’s a big one. So, first of all, what I’m going to say is I think we’re going to reassess most of what we think we have learned over the last 40 years in asset management. And let me be a little bit clear, I think active management is absolutely the soup du jour, and more importantly, is going to get some balance. But let me go back to what I think. What happened in the Ukraine relative to Russia, it’s just not about exposure anymore. It’s really about the fact that any of us, if we knew it at all, don’t understand NATO. We have not seen maps before the end of World War II. That it is possible that when we relook at what is happening from a military strategy and diplomacy and political area, that we’re going to remake all our indices Or at least we’re going to redefine the indices. We could become more regional. And finally, we’re really going to think about structural inflation. And I would also sort of tag onto there that the era of just-in-time is over. And so, supply chains are going to shorten and change, all of which to say is I think it’s a tremendous time for active management. I think it is a very difficult time for committees and staff because they’re really going to have to rethink their lineups, how they’re taking risk, and in a sense, recalculate risk. The thing is that our investment world may have precepts that combined philosophies, Keynesian philosophies between the great wars as much as for today. But I think the silver lining is we’ve got so many more quantitative resources, we’re really going to be able to tackle it from a very different perspective.
Aoifinn Devitt: So a lot more to deal with, to cope with, but perhaps better tools to enable us to make sense of all that.
Cynthia Steer: Exactly right.
Aoifinn Devitt: Yeah. So you now have a suite of board and investment committee positions. What do you seek to bring to these positions?
Cynthia Steer: When I thought about this question, I thought it was an extraordinarily important one. I think I bring perspective. I think I bring balance. I’ve seen a lot and seen a lot of situations. But more than that, I think I bring two things: the ability to listen and the ability to park my ego at the door and work on behalf of the entity. Finally, in my board work, I’ve got 3 precepts. One, that I try to help my community. That’s number 1. Number 2, that in the years I have left to be in the investment world, that I’m focused on diversity and really trying to help create diverse firms who are creating wealth for themselves. In other words, really trying to move that needle forward. And as you noted, I’m on the board of Exponent, which is one of those firms that’s been around and is doing some very extraordinary things. And the last thing is energy transition. So I guess to sum up, I’m really focused on two issues that I feel passionate about and helping my community do better by its citizens and do better by its overall mission.
Aoifinn Devitt: The other reason I asked that question is because I agree with you, it is an important question because of the fact that there’s so rarely a manual or a guidebook as to how to be an effective director or chair or board member. Now that you’ve observed many boards over the course of your career, can you sum up what makes an effective director or chair besides being passionate and committed to the causes that you mentioned?
Cynthia Steer: I think there’s the everyday things of blocking and tackling, but those actually— the average board package is over 200 pages these days. So doing the homework, coming to the meetings, and making sure your voice is heard, not necessarily to achieve consensus, but to try to put it in a way that you can effectively communicate. And then finally, standing up when there’s an issue that has to be faced. But I would also say to you that you’re exactly correct that being on a board is an art, not a science. And one of the things that people like myself are— is that we’re not getting enough sort of younger members on the board to learn the art, but they more understand the science, if that makes sense.
Aoifinn Devitt: Of course. And there is also the problem of recruiting for these board positions sometimes requires a laundry list of qualifications or prior positions that could be challenging for the younger applicants to get to. So it is a bit of a problem.
Cynthia Steer: Oh, I don’t disagree with you. It is sort of a chicken and the egg. And many of the women that I have talked to about this says, well, How do I start? And again, I would give the advice that you need to start in your 40s, get on a couple of boards, make sure it’s around your expertise, and start to understand governance and just make it part of your quote-unquote program, part of the way you’re looking at the world.
Aoifinn Devitt: And moving now to some personal reflections, you mentioned the mentors you’ve had over the course of your career. If you were to single out any one or two, just to share how they made an impact on you, could you mention anyone here?
Cynthia Steer: Yeah, first of all, I think I want to give credit to my father and my mother. My dad said, “The only person you have to please in the end is the one in the mirror.” That sense of value. My mother was a courageous, gritty woman who once she stood her ground, you as a child knew that it was sort of a hopeless task. So I also got a bit of that. As a child, my hero was Dag Hammarskjöld, who died in a plane crash in the Congo, and he was the former head of the UN, of trying to do something for others. The last person I’d mention is Richard Ennis. Richard Ennis probably gave me the best piece of advice in my professional career. He said, each year or every other year, pick a couple of topics. Where you’re really interested and you have some expertise and just really think about those for that period of time. And it really has served me well over the last years. But I have been extraordinarily blessed from great athletic coaches to mentors and advocates throughout my whole career.
Aoifinn Devitt: And what was your chosen athletic passion if you had a coach there?
Cynthia Steer: I had two coaches. And when I was a little girl, I was a figure skater. And later on, I was all track and field. I was a half miler and national champion.
Aoifinn Devitt: Yet another layer that I’m discovering through this podcast. So that’s wonderful. And I do think it’s important that you mentioned coaches at that young age, because certainly they are part of the fabric that allows us to set our goals and our ambition at that young age. So I think it’s really notable that you mentioned them. And even those people you mentioned have given us tons of wisdom along with their mention. One of my next questions is usually around pieces of advice or wisdom or any creed or motto that you live by. You’ve already given us a number, but is there anything else that you can share here?
Cynthia Steer: I’m just going to share a coaching yet. I was about 8 years old and I was lucky to have 2 Olympic coaches. I was in Canada and I was trying to do an axel, which is one revolution. And for girls my generation, that was sort of unheard And every time I flung myself up in the air and crashed down on the ice, he said, you know, because there were no harnesses in those days, right? He said, just get up and try it again. Get up and try it again. So these early lessons, and then there was notorious patch, which I hated. It’s just, you’re tracing a figure 8 around the ice and ridiculous. I didn’t like it then, and I think I’d probably hate it now, but it teaches you that Only good things are done by hard work and doing things you like as well as you don’t like. So I guess that’s the advice I do is it’s a total package.
Aoifinn Devitt: I love that. And I also love what you said about focusing on 4 things or a number of things a year to really get deep on, because that I think forces you to crystallize your thoughts. And my experience with crystallizing thoughts is that you can then recycle those thoughts over and over. But it is a really interesting way of approaching work. So thank you for sharing that. My last question is around any advice you would have for your younger self. We’ve— anything maybe that you wish you could tell that young person entering the world of investing a few decades ago?
Cynthia Steer: I think that is a great question. I guess I would say to my younger self, if that was possible, that to take sort of a softer stick along the way. Women of my generation had so few of us, we really almost had to listen to our own drummer. But I’d say to her, you can soften up a bit, people are going to listen. And then I would support her on the other side and saying, your habit of just reaching out to people and making deep relationships is going to be one of the joys and hallmarks of your career. So go for it., and your value of life, of doing kindness where no one sees it, will stand you in good stead.
Aoifinn Devitt: Well, those are beautiful reflections, and I am intrigued by the notion of a, a softer stick because I wonder, is there such a thing? If we were to start out with a soft stick, would we feel it was doing any good at all? So I’m, I understand that the concept, but I, I always wonder whether our younger selves would know what to do with that advice at the time.
Cynthia Steer: I should— my younger self would have said, hell no. Absolutely.
Aoifinn Devitt: Well, Cynthia, it’s been such a pleasure to get a little bit more of a context around some of those wonderful strategy meetings we used to have on the conference circuit. I knew then, but I definitely know now how much you have raised the bar for our industry. And I didn’t know then how early you started doing that, breaking barriers at 8 years old. Thank you so much for coming here and for sharing these many, many words of wisdom with us.
Cynthia Steer: Well, thank you. This has been delightful. I’m actually a tad bit embarrassed. So thanks so much for asking me.
Aoifinn Devitt: I’m Aoifinn Devitt. Thank you for listening to the 50 Faces Podcast. If you like what you heard and would like to tune in to hear more inspiring investors and their personal journeys, please subscribe on Apple Podcasts or wherever you get your podcasts. This podcast is for informational purposes only and should not be construed as investment advice, and all views are personal and should should not be attributed to the organizations and affiliations of the host or any guest.
Aoifinn Devitt: This podcast was made possible by the kind support of Alvine Capital Management, a London-based specialist investment advisor and placement boutique.
Cynthia Steer: I loved learning to take risk. I was very lucky early in my career, and this is where I think it’s just not luck. It’s having people who are your advocates, not your mentors, your advocate.
Aoifinn Devitt: I’m Aoifinn Devitt, and welcome to the 50 Faces Podcast, a podcast committed to revealing the richness and diversity of the world of investment by focusing on its people and their stories. I’m joined today by Cynthia Steer, who has had a multi-decade career in investment management, spending time as an investment director, CIO, Chief Research Strategist at a series of large consulting firms, and now with a broad range of investment committee and independent director roles. Welcome, Cynthia. Thanks for joining me today.
Cynthia Steer: Thanks, Aoifinn, for having me, and I am delighted to be here, and I think your series is marvelous.
Aoifinn Devitt: Well, we are thrilled to have you. So let’s start where we always start with your background and career journey. Where did you grow up? What did you study? And how did you come to enter the world of investing?
Cynthia Steer: So I can say truthfully, a child of the Northeast, and let me explain that. I grew up in a farm town outside of Toronto, Ontario, and my family hailed from two places in northern New England— well, not so northern, but Gloucester, Massachusetts, as they say, and Lake Winnipesaukee, New Hampshire. All of them were old-fashioned towns with deep traditions, and basically, You can group them all by saying that mothers locked the doors around 4 o’clock when you got home from school, and they did not want to see you until about 6 o’clock or 7 o’clock when dinner was had. And how did I come? I think by accident. I always wanted to do something internationally. So for me, graduate school was either a choice of law or business, and business looked more flexible. My undergraduate studies were frankly in urban studies, both the sociology and education. And I spent a couple of years teaching on the Lower East Side in New York, doing what I considered to be my military service before I went on to graduate school. So, to me, entering the world of investing was a byproduct of wanting to do something internationally.
Aoifinn Devitt: That’s so interesting because it’s actually why I ended up in corporate law as a branch of law and ultimately finance as well. So, very similar kind of instincts, I think. And you’re right, it is more flexible. Tell me a little bit about your international career then. Where did you work? And maybe across your career, what made a real impression on you location-wise?
Cynthia Steer: I was one of the people, instead of being transferred abroad, I was one of the who people chose to stay in the States and work constantly. For instance, in one job, I commuted between Paris and New York. Not shabby, frankly. But most of my jobs were based in New York. Not in Boston, from where I came, because opportunities for women were short, if not invisible, when I got out of business school. So, I spent a lot of my time on planes, as most of us did, a lot of my time talking to people overseas, and a lot of my time, in a sense, reading and getting to know people. I also traveled extensively towards the last part of my career as part of I was chair of an IMF World Bank committee that was doing technical assistance in the EMD markets in the knots before the global financial crisis. So, I spent a fair amount of my time on the road for that also.
Aoifinn Devitt: Well, I certainly do want to ask you about your career’s highs and lows, but I think before that, I’d like to just get into some of your core investment beliefs because I’ve known you as an investment strategist, a research strategist, speaking at many of the conferences we’ve shared together, and you’ve perhaps had time for those beliefs to evolve over time, but can you talk to any core investment beliefs you hold and how they’ve evolved over time?
Cynthia Steer: It’s interesting you ask that question because I don’t know that my core beliefs have ever really changed in I a— mean, to me, it’s always about people and trusting people. The act of investing in and of itself, the way we do it, is that you trust somebody with somebody else’s money. And that to me is the way I learned to look at it as a fiduciary and continue. So I guess, first of all, my core belief is that I am first and foremost a fiduciary with all that that means, both the good and the bad side. The second thing is I believe in people. I believe that people are talented. Generally of good values and sense, but I also trust and then verify. Over time, what has changed, I think, is that I rely more on quantitative analysis than when I first got into the business when quantitative analysis was not available. You could do some math and things like this, but you really just didn’t have real-time information. You had to structure your beliefs or what you were going to do and posit in a series of sort of, if this happens and this happens, then what am I going to think about this? What’s the long-term and short-term? In a sense, that actually has done me well over my career because, as you said, I’ve spent a fair amount of my time as a strategist. The last thing that I say is I believe that you cannot be a generalist. I think you can start as a generalist, but you’ve got to have some subject matter expertise. Early in my career, I was fortunate to go through a credit trading program and go back into operations, and that is not an expertise, but it’s a skillset that I value. And I also learned about foreign exchange markets and real estate. And so, those are skillsets and emerging markets. I’ve always been in the emerging markets, have been since the beginning of my career. To the end of my career. Imagine coming out of business school, getting to be the executive assistant to the head of Latin American lending, think you’ve got a really great job, and it’s 1982, 1983, and it’s the beginning of the blowup in Latin America where all things good went bad. So again, trust, verify, do your homework. And the last thing I think that has evolved is Teamwork. 4 people working together are always much more than 4. And so each person counts. Finally, I guess the last thing is every dollar counts. When you’re in the nonprofit area, I sit on 2 community foundations, and when we make extra dollars, they’ll go to a homeless shelter, they’ll go to an art museum. They’ll go to a young child who wants to become and play in a symphony. They’ll go to beautifying a school or an extra program. So extra cents counts.
Aoifinn Devitt: That’s really interesting reflections. And I think I would share your view about specialization. And I was given that advice early in my career as a young person to become a go-to person on certain areas that, that would kind of instantly get you some recognition maybe among the senior ranks. And it it was, was good advice then to lift me out of that generalist pool. It’s very interesting.
Cynthia Steer: Oh, I want to go back to that because I couldn’t agree with you more. I had a first boss. My first job was at American Express, both on the bank side and the treasury side. And I had a boss who was a strategic planner who had really come out of GE when GE strategic planning was very, very hot. And I would wait to write a note to him on the market till 8 o’clock at night, handwritten note, give him the latest in the market for the day. And you’re exactly right. For women, it was the only way to move forward.
Aoifinn Devitt: So interesting. Well, let’s talk now about perhaps the evolution of diversity in the world of investment throughout your career. You mentioned when you started in Boston, there were no roles for women. And now clearly, towards this stage of your career, there’s quite a different landscape, we would hope. Can you maybe give us your assessment of how diversity in the industry has changed and where you think it is today versus where it should be?
Cynthia Steer: Well, number one, I want to say that diversity is much better than when I started. When I started and went to Wharton, there were 15% of the class were women. Now, obviously, over 50%, as an example. I think in my training class coming out of Wharton, my credit training, I think there were maybe 3 of us out of 15. Again, sort of low numbers. In the world of investments, that’s an interesting— In the world of investments, I had a number of women fellow CIOs. Myra Drucker is one of them. Judy Maris, who most people don’t know, is another. And we all sort of came out the same time, but it was, whoa, true diversity was not to be had. And I credit a lot with my sensitivity to diversity and really trying to underwrite emerging managers over since the mid-’90s, mid to late ’90s, to Denise Napier, the former treasurer of Connecticut, who I got to know in the mid-’90s. And she just shone a light on this. Today, I think we’re doing a lot, but if you look from 2005 on, we still haven’t done enough. Yes, we have emerging manager programs, but what I would’ve expected by now is that firms would’ve been funded on the alt side, and that’s only beginning to happen. That the large firms would’ve been much more diverse than they are. Although I think that that is beginning to happen because you see it more than the junior levels, you see it at the mid-management level. The fight still is at the top, but I think we have a long way to go. That being said, the window over the last 2 years has been extraordinary. And what I’m hoping is that we have at least another 2 years with this kind of tremendous momentum to really put in place some extraordinary things.
Aoifinn Devitt: Well, let’s hope we do continue to see some of the progress being built on, but I think it’s interesting that we haven’t come as far as you maybe hoped we would come, and it’s really a head-scratcher as to why that is. If you look back at your career, as I said, the travel you’ve built into it is the stuff of envy, at least for me, because I am a passionate traveler and I think observer of other cultures and I really believe it makes us better professionals when we do that. What would you say were some of the career highs and lows over the course of your career?
Cynthia Steer: Well, to start with the travel, I must admit I love the travel. I love coming home, but I love the travel. I used to do— just to make you laugh, I’ve always been passionate about the emerging markets, but I used to do my tarmac test. What was a tarmac test? It was a level of corruption in the country. The worse the tarmac, the higher the corruption. But in terms of travel and my highs and lows, to me, I loved learning to take risk. I was very lucky early in my career, and this is where I think it’s just not luck. It’s having people who are your advocates, not your mentors. Your advocate. I had a first boss who said he’d never gone into operations and never seen sort of how the sausage is made. So he sent me for 6 months into the operational area. All my peer group thought it was horrible. I got to understand what letters of credit were, bankers’ acceptances. I got to see how a loan calculation worked. I got to see how a forward contract was calculated. And I can’t tell you how important that’s been. So, early in my career, I was able to pick up some very significant skill sets. Foreign exchange, I traded foreign exchange. In the mid-’80s, I had the opportunity to trade a billion-dollar book. You couldn’t do this any way, shape, or form today as a young trader. I also got to meet some women who were extraordinary in the foreign exchange area. Then I had added on real estate to my career. I actually had the opportunity to work for the Brofman family and learn about swaps because we were doing a very large credit transaction and the largest monetization of a real estate portfolio. So being able to have these early transactions allowed me when I got a tremendous opportunity to become the CIO of United Technologies in the early ’90s, to understand how money is invested and to take a look at managers. Along the way, as my expertise deepened, I got a lot more skill sets about judging people, and that to me also differentiated. But along the way also, comes mistakes. And the idea that you are fiduciary in that industry and an ERISA fiduciary did not only make me pause, but reared its ugly head in the sense that I had to tell management at one particular job that I felt that a particular manager was inappropriately handling the portfolio. That did not go down all that well. But it comes back to what are you doing? Who are you looking in the mirror? And it’s generally you. I would say that my last job was the most interesting from putting all my skill sets together, from managing a group that had outsourced CIO to creating a manager research platform to overseeing a trillion and a half in strategies and really trying to be able to communicate that to senior management. So I’ve been more lucky than most, but I must admit I’ve had mentors, I’ve had advocates, and along the way probably have had a little bit of common sense.
Aoifinn Devitt: Well, certainly the common sense is a key part of, of the learning in this division above all. I can’t let this conversation pass without asking you to look in the crystal ball a little, because as a strategist, you must have done this for most of your career with respect to markets and assets. But if you were to turn that crystal ball on our world of investment management, can you say how you think it will look like in 5 to 10 years? And I’m going to be greedy here and ask you to comment on things as diverse as active versus passive management, maybe diversity overall, how we’ll be approaching maybe different products. Are there any kind of key areas you think you will see change?
Cynthia Steer: That’s a big one. So, first of all, what I’m going to say is I think we’re going to reassess most of what we think we have learned over the last 40 years in asset management. And let me be a little bit clear, I think active management is absolutely the soup du jour, and more importantly, is going to get some balance. But let me go back to what I think. What happened in the Ukraine relative to Russia, it’s just not about exposure anymore. It’s really about the fact that any of us, if we knew it at all, don’t understand NATO. We have not seen maps before the end of World War II. That it is possible that when we relook at what is happening from a military strategy and diplomacy and political area, that we’re going to remake all our indices Or at least we’re going to redefine the indices. We could become more regional. And finally, we’re really going to think about structural inflation. And I would also sort of tag onto there that the era of just-in-time is over. And so, supply chains are going to shorten and change, all of which to say is I think it’s a tremendous time for active management. I think it is a very difficult time for committees and staff because they’re really going to have to rethink their lineups, how they’re taking risk, and in a sense, recalculate risk. The thing is that our investment world may have precepts that combined philosophies, Keynesian philosophies between the great wars as much as for today. But I think the silver lining is we’ve got so many more quantitative resources, we’re really going to be able to tackle it from a very different perspective.
Aoifinn Devitt: So a lot more to deal with, to cope with, but perhaps better tools to enable us to make sense of all that.
Cynthia Steer: Exactly right.
Aoifinn Devitt: Yeah. So you now have a suite of board and investment committee positions. What do you seek to bring to these positions?
Cynthia Steer: When I thought about this question, I thought it was an extraordinarily important one. I think I bring perspective. I think I bring balance. I’ve seen a lot and seen a lot of situations. But more than that, I think I bring two things: the ability to listen and the ability to park my ego at the door and work on behalf of the entity. Finally, in my board work, I’ve got 3 precepts. One, that I try to help my community. That’s number 1. Number 2, that in the years I have left to be in the investment world, that I’m focused on diversity and really trying to help create diverse firms who are creating wealth for themselves. In other words, really trying to move that needle forward. And as you noted, I’m on the board of Exponent, which is one of those firms that’s been around and is doing some very extraordinary things. And the last thing is energy transition. So I guess to sum up, I’m really focused on two issues that I feel passionate about and helping my community do better by its citizens and do better by its overall mission.
Aoifinn Devitt: The other reason I asked that question is because I agree with you, it is an important question because of the fact that there’s so rarely a manual or a guidebook as to how to be an effective director or chair or board member. Now that you’ve observed many boards over the course of your career, can you sum up what makes an effective director or chair besides being passionate and committed to the causes that you mentioned?
Cynthia Steer: I think there’s the everyday things of blocking and tackling, but those actually— the average board package is over 200 pages these days. So doing the homework, coming to the meetings, and making sure your voice is heard, not necessarily to achieve consensus, but to try to put it in a way that you can effectively communicate. And then finally, standing up when there’s an issue that has to be faced. But I would also say to you that you’re exactly correct that being on a board is an art, not a science. And one of the things that people like myself are— is that we’re not getting enough sort of younger members on the board to learn the art, but they more understand the science, if that makes sense.
Aoifinn Devitt: Of course. And there is also the problem of recruiting for these board positions sometimes requires a laundry list of qualifications or prior positions that could be challenging for the younger applicants to get to. So it is a bit of a problem.
Cynthia Steer: Oh, I don’t disagree with you. It is sort of a chicken and the egg. And many of the women that I have talked to about this says, well, How do I start? And again, I would give the advice that you need to start in your 40s, get on a couple of boards, make sure it’s around your expertise, and start to understand governance and just make it part of your quote-unquote program, part of the way you’re looking at the world.
Aoifinn Devitt: And moving now to some personal reflections, you mentioned the mentors you’ve had over the course of your career. If you were to single out any one or two, just to share how they made an impact on you, could you mention anyone here?
Cynthia Steer: Yeah, first of all, I think I want to give credit to my father and my mother. My dad said, “The only person you have to please in the end is the one in the mirror.” That sense of value. My mother was a courageous, gritty woman who once she stood her ground, you as a child knew that it was sort of a hopeless task. So I also got a bit of that. As a child, my hero was Dag Hammarskjöld, who died in a plane crash in the Congo, and he was the former head of the UN, of trying to do something for others. The last person I’d mention is Richard Ennis. Richard Ennis probably gave me the best piece of advice in my professional career. He said, each year or every other year, pick a couple of topics. Where you’re really interested and you have some expertise and just really think about those for that period of time. And it really has served me well over the last years. But I have been extraordinarily blessed from great athletic coaches to mentors and advocates throughout my whole career.
Aoifinn Devitt: And what was your chosen athletic passion if you had a coach there?
Cynthia Steer: I had two coaches. And when I was a little girl, I was a figure skater. And later on, I was all track and field. I was a half miler and national champion.
Aoifinn Devitt: Yet another layer that I’m discovering through this podcast. So that’s wonderful. And I do think it’s important that you mentioned coaches at that young age, because certainly they are part of the fabric that allows us to set our goals and our ambition at that young age. So I think it’s really notable that you mentioned them. And even those people you mentioned have given us tons of wisdom along with their mention. One of my next questions is usually around pieces of advice or wisdom or any creed or motto that you live by. You’ve already given us a number, but is there anything else that you can share here?
Cynthia Steer: I’m just going to share a coaching yet. I was about 8 years old and I was lucky to have 2 Olympic coaches. I was in Canada and I was trying to do an axel, which is one revolution. And for girls my generation, that was sort of unheard And every time I flung myself up in the air and crashed down on the ice, he said, you know, because there were no harnesses in those days, right? He said, just get up and try it again. Get up and try it again. So these early lessons, and then there was notorious patch, which I hated. It’s just, you’re tracing a figure 8 around the ice and ridiculous. I didn’t like it then, and I think I’d probably hate it now, but it teaches you that Only good things are done by hard work and doing things you like as well as you don’t like. So I guess that’s the advice I do is it’s a total package.
Aoifinn Devitt: I love that. And I also love what you said about focusing on 4 things or a number of things a year to really get deep on, because that I think forces you to crystallize your thoughts. And my experience with crystallizing thoughts is that you can then recycle those thoughts over and over. But it is a really interesting way of approaching work. So thank you for sharing that. My last question is around any advice you would have for your younger self. We’ve— anything maybe that you wish you could tell that young person entering the world of investing a few decades ago?
Cynthia Steer: I think that is a great question. I guess I would say to my younger self, if that was possible, that to take sort of a softer stick along the way. Women of my generation had so few of us, we really almost had to listen to our own drummer. But I’d say to her, you can soften up a bit, people are going to listen. And then I would support her on the other side and saying, your habit of just reaching out to people and making deep relationships is going to be one of the joys and hallmarks of your career. So go for it., and your value of life, of doing kindness where no one sees it, will stand you in good stead.
Aoifinn Devitt: Well, those are beautiful reflections, and I am intrigued by the notion of a, a softer stick because I wonder, is there such a thing? If we were to start out with a soft stick, would we feel it was doing any good at all? So I’m, I understand that the concept, but I, I always wonder whether our younger selves would know what to do with that advice at the time.
Cynthia Steer: I should— my younger self would have said, hell no. Absolutely.
Aoifinn Devitt: Well, Cynthia, it’s been such a pleasure to get a little bit more of a context around some of those wonderful strategy meetings we used to have on the conference circuit. I knew then, but I definitely know now how much you have raised the bar for our industry. And I didn’t know then how early you started doing that, breaking barriers at 8 years old. Thank you so much for coming here and for sharing these many, many words of wisdom with us.
Cynthia Steer: Well, thank you. This has been delightful. I’m actually a tad bit embarrassed. So thanks so much for asking me.
Aoifinn Devitt: I’m Aoifinn Devitt. Thank you for listening to the 50 Faces Podcast. If you like what you heard and would like to tune in to hear more inspiring investors and their personal journeys, please subscribe on Apple Podcasts or wherever you get your podcasts. This podcast is for informational purposes only and should not be construed as investment advice, and all views are personal and should should not be attributed to the organizations and affiliations of the host or any guest.
