Aoifinn Devitt: Series 3 is kindly supported by Eagle Point Credit Management. Eagle Point Credit Management is a specialist investment manager principally focused on income-oriented credit investments in niche and inefficient markets. Founded by Thomas Majewski in partnership with Stone Point Capital in 2012, Eagle Point currently manages over $7.8 billion in AUM. Investment strategies pursued by the firm include collateralized loan obligations, CLOs, portfolio debt securities, and other opportunities across the credit universe. Currently, Eagle Point is the largest investor in CLO equity in the world and one of the largest non-bank lenders focused on providing financing solutions to credit funds. You can learn more about Eagle Point at eaglepointcredit.com. Our next guest is a CIO with unique insights into fintech. Find out from him what the latest advances mean and how integrating a human overlay in its use will be so critical. He’s also a strong advocate of having a view in the world of investing and of seeking out opposing views. 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 David Simmons, who is Chief Investment Officer at Cadro and an external investment committee member at Wealthify, where he was previously CIO. He holds additional investment committee and advisory roles and is an adjunct lecturer at Heriot-Watt University. Welcome, David. Thanks for joining me today.
David: Great. Thanks for having me.
Aoifinn Devitt: Well, let’s start with your background and career journey. Where did you grow up? What were your early interests and how did you come to enter the world of investing and finance?
David: So I grew up just outside of London. I was always pretty interested in how the world worked. So did maths, science, economics, and also actually psychology, which I studied at A-level. University, I did bachelor’s and master’s in economics, and actually I was on the path to do a PhD. So I had the 1+3 scholarship from Research Council. And but actually during the milk rounds, as it was called back then, I got a job with an emerging markets-focused bank called Standard Chartered, which was quite a bit smaller in the UK than it is now, but it obviously had a significant global presence in the fast-growing markets. Did a 2-year graduate program in London and then actually went to New York to work as a US economist back in 2007. I agreed to do that in the, the summer of 2007, just before everything started to get interesting.
Aoifinn Devitt: Well, I’m starting to see all the links now with some of your academic work, and I’m also going to hold that thought on the psychology piece because it may come up later when we talk a little bit about fintech. Talk us through your career then, once you entered and you ended up as a CIO with what you’re doing today. Were there any surprising turns along that path?
David: So, I mean, I think probably take it back to a bit before being the CIO. So left Standard Chartered as I was wrapping up my Executive MBA at University of Cambridge, which was an excellent experience. And then actually I moved to abroad to Paris to run an economics research team. So I don’t speak French, but went to work for a French firm in Paris. They’d been bought by a German firm, and the office environment was almost entirely in English. So this was ideal for them, having someone who didn’t speak French or German. It’s the first time I’d formally managed a team, very diverse team from Latin America, Africa, and Europe. But equally, it was really swapping the end of the telescope for me. So I’m going from being a single-country economist to being very globally focused, running a team, and actually trade credit they very much worry about what’s happening in the economy, but is it going up or down? Interest rates, inflation, and default rates, and then much more of a geopolitical overlay. So it’s sort of a very different path, complete swap really to what I was doing before. And actually, and again, it’s my own fault for not learning French, but it was quite hard to settle in France. So actually my wife and I returned back to London where I took a role working as a global macro investment strategist at HSBC. And that’s where I really got exposure to asset management, working with portfolio managers who were the key internal clients, and then also the various external clients. And then unsurprisingly, my, my focus there was the US, but very much how that fitted into the, the worldview. And what was probably useful was taking the sell-side experience, which is a lot more short-term, the insurance-focused experience, which is incredibly long-term, and kind of porting that into the buy-side, which is perhaps a bit more in between. And there’s a lot more focus on the balance of probability and what the markets is pricing within the buy side and asset management. And actually, after doing that in London for a couple of years, my wife and I decided we would move somewhere that we wanted to live rather than living somewhere for work. And we actually relocated up to Edinburgh, which was somewhere that we’d always been on holiday and always loved. And that was a very different move. Most people in finance will tend to move for work. And actually, once we’d had a bit of time out and settled in, you had the post-Brexit rapidly emerging asset management industry. So finding a role was perhaps harder than it would’ve been a few years previously. And that’s when I came across a role which was just advertised on LinkedIn to run investment strategy at Wealthify, who’d just been majority acquired by Aviva. And again, that was very different to what I had done previously, having worked for incredibly large companies with tens of thousands or maybe even hundreds of thousands of employees and going working for a startup fintech that had just under 30. Employees, and again, it was very focused, rapidly going, and they were really keen to open up investing to anyone, and you could do so from a pound. So very different environment. And again, know, you they were sort of interested in my skills and what I could bring. And for me, it was also you understanding, know, what I would have the opportunity to learn there as well.
Aoifinn Devitt: Can you talk about your move to Cadro?
David: So I’ve been fortunate over the years to have had several approaches via recruiters or LinkedIn. But I really wanted my next step to evolve my career and knowledge further. So when I spoke to Natasha Williams and Jordan Buck, who are the two co-founders of Cadro, I could see that they were looking to do something different and bring wealth management, and particularly the client communication element of that industry, into the 21st century. Now they’re doing this using an app smartly to keep clients updated and also at the same time bringing greater private market knowledge to the investing process. And that was really important for me because private markets was the gap in my experience. I’ve got extensive public market experience. I’ve even done some angel investing and crowdfunding over the years, but this was another exciting opportunity to build something. And it was the building that I also really enjoyed at And, Wealthfi. You know, we certainly had a fantastic time doing that at Cadro over the last year.
Aoifinn Devitt: Well, let’s dig in a little bit to that world of fintech because it’s not something we’ve actually talked about a lot on this podcast series, surprisingly. Can you tell us a little bit about the world of fintech? From your vantage point today and how you see it improving the investment landscape?
David: Certainly. So I mean, I think one of the most interesting things about fintech, which everyone thinks of being incredibly dynamic, is that part of it, at least the neo banks, are very much sparked by that old institution, the Bank of England, who were looking to increase innovation and competition. And I think they’ll be very pleased with the progress they’ve made there. And equally on the asset management side of things, It was very much born out of frustration with the existing investment firms’ apps. And I won’t name names, but most of the big firms don’t have, or at least a decade ago didn’t have particularly dynamic apps, whereas the fintech starting or wealth tech or even the regtech firms then were very quickly able to respond to client suggestions. And they also didn’t have the legacy systems that you were seeing. So they were able to be much more nimble. They were built purely for this purpose rather than necessarily trying to block together 3 or 4 different systems and come up with something. And I think that was one of the things that was particularly appealing about Wealthfy is that they were very much focused on bringing investment to everyone and making it accessible in the same way as if you are applying for a bank account at one of the challenger banks. They don’t have any branches. You have to do everything online. And again, there’s companies that have helped make that process easier. So when you do your identity check for whichever bank you are signing up for, the fact that you’ve got the phone in your pocket that lets you do all of that makes it incredibly easy to handle and to scale. And I think every time people find a problem with that process, you actually see either the individual fintech that I’m trying to solve it or go out and buy. So there’s very much a build or buy mentality. And I think that’s also one of the approaches that I like, is that it’s very much a problem-solving industry. And that’s really the focus that I think has been particularly interesting. And that’s also probably borne out because you’ve got a lot of people who are engineers and software engineers in particular, who are very problem-solving focused, and they are going to take that approach and fix what is in front of them. And I think that, you know, that has been something that’s been incredible to, to see, which I really wasn’t exposed to working in the banks or the insurance firms, because also, again, you didn’t have that high degree of people being able to code, which I think, again, over the last decade, you see a lot more people who are able to code in the banks who are coming forward to the front office, to the head of the firms, rather than being in the, the quant division.
Aoifinn Devitt: That’s really interesting, that focus on problem solving. And I’m also hearing there’s a certain dynamism, responsiveness, that kind of innovation that probably goes with the tech part of the fintech, perhaps less of the fin. And you mentioned you studied psychology. I’m not sure whether you use your psychology skills much in that role, but see— I’d I think there is certainly an evolution too in fintech around understanding the consumer, the customer psychology, and responding to that. How much of that did you see in practice?
David: Well, I think a lot of the, the interesting part has actually been the consumer testing, because ultimately, if you are trying to create a product that people want to use, you do have to test it and you do have to refine it. So I think that, that part has been particularly interesting. But also, if you think about the last decade, it’s only really the last 18 months, and then for a brief period in 2020 when markets have actually gone down. So there’s, there’s very much a communication element to the role over the last couple of years that maybe hasn’t been there previously. And I think it, it’s trying to put yourself in the investor’s shoes and help them you understand, know, that this is why this is occurring, this is what we’re, we’re doing about it. And markets haven’t necessarily been functioning as, as normal since the global financial crisis. And the recent corrections that we’ve been seeing are much more of a part of normalization rather than the, just the, the end of markets going up. I think it’s that you are going to see a repricing going forward. But if you haven’t seen that while you’ve been on your investing journey, it’s a very difficult thing to bear.
Aoifinn Devitt: It’s really interesting. And then just in terms of the crystal ball question, which I know is a difficult one, if you were to look 5 years hence, where do you think the conversations will be sort of centering when it comes to fintech? Some of this rollout of product, do you think we’ll be talking about more psychology-based coaching, or will we be looking at impact, investing with purpose? Where do you think we’re going to land?
David: So I think if you look at what’s happened over the last decade, obviously you’ve seen significant progress, but it’s still— you’ve got those young companies that are coming in and finding a niche and driving their advantage compared to the incumbent. But I think what’s most interesting going forward is that you’re probably going to see an increase both in personalization and in interactions, as you say, with some of the coaching element. And that’s starting to come through in some of the firms that you’re seeing now. But I think it’s the personalization part that I probably find most interesting, because I think if you look even just 5 years ago where we were with regards to ESG and sustainable investing, It’s moved very much from the sidelines to being a major component of what investors, both institutional and individuals, are demanding. But going forward, I feel that people would want to be able to exclude or include things according to their beliefs and judgments in their portfolio. And some of those are actually going to be much easier to do and also are going to be much more contentious. So for instance, if you look at nuclear power, Nuclear power tends to be a reasonable divider within the ESG space. Some people are pro, they see it as being one of the components of the future of energy, others less so. Similarly, alcohol can depend on who you ask. But things such as modern slavery and pollution, absolutely not. There’s no discussion about that. So I think it’s interesting that there are areas where there are discussions for which people might want to have personalization, and then you look at the components where there isn’t a discussion. Because we can all agree that we should be doing our best to tackle those. That’s where the area for pressure and progress that companies can agree on, and actually you can get individual investors more involved. And I think that’s when they’re interested, when they feel involved and they can see the difference that they’re making. And I think we’re still at a very early stage of that. You’re starting to see it a bit more in the US, but in the UK and Europe, you don’t really have the the depth of ETFs and mutual funds that allow that personalization. So you are unfortunately left with maybe a bit more of a cookie-cutter approach at present. But ultimately, what’s also very important for customers and investors and clients is that when you say you’re going to be excluding something, you exclude that. And I think that’s the thing that I very much enjoying the ESG space is talking to those portfolio managers who have got the commitment and they are doing the work and they’re investing in line both with their values, but also in the companies that they see as being a long-term positive investment.
Aoifinn Devitt: Really interesting that on the one hand, the US is more developed in terms of product, but I would suggest it’s not as developed in terms of this messaging and some of this movement. In some ways it’s actually, it’s not universally understood as being the way investors investment is done the way it might be, say, in Europe or Asia or Australia. I’d love to relate some of what you’re saying here about the industry and fintech to the work you do at Cadro and Wealthify. Can you tell us a little bit about how that comes in?
David: Certainly. So I’m currently sitting on the investment committee at Wealthify, where I was previously the CIO, and I’m CIO at Cadro, where I oversee the the investment process. So I think when you look at how we are approaching ESG investing, so for instance at Wealthify we exclude weapons, tobacco, gambling, and adult entertainment. And at Cadre, how we’re thinking about it is also as part of an input into our overall risk portfolio considerations. So I think that’s one of the things that that I really like is that you’re seeing established investors include it as a consideration from a governance perspective in their investment process. So even if you are not considering ESG as a major component, or you are not running an ESG fund, it’s still interesting to think about, well, how are these companies doing? Because those companies that have got a higher or more positive ESG score, you can expect them to avoid longevity issues. So for instance, if you’re a company and you’re taking aggressive action to lessen your carbon footprint by reducing your energy usage, that’s going to be saving you money. And I think to the point that the US isn’t maybe as, as agreed as we are in Europe of it being a valuable approach, I still think that there’s going to be that element of people can see, well, it’s an interesting factor and you should be including some of the elements in it, whether or not you want to actually have it as your overall approach. And some people just don’t like it having the restriction on their universe. And I think that that’s for them to decide, and that’s their investment offering. But I think the most important thing that I always feel with ESG and sustainable investing is that you are doing what you say you are doing, because you ultimately have to be investing with integrity or it’s simply going to be meaningless as a product.
Aoifinn Devitt: Absolutely. Or quickly, the cynicism will kick in, and I think then you lose the trust perhaps that you’ve taken so long to build. You sit on, you mentioned sitting on an investment committee, but you also sit on other investment committees, other boards, advisory or otherwise. What do you bring to those roles? What do you think makes a good, effective investment committee or board member?
David: Well, I think I sit on the other side of the fence most of the time, so I’ve got executive role at Cadro, which is the vast majority of my working days. But I think it’s sitting on that other side when you are there to provide constructive challenge to decisions and views. You’re really not the executive, you’re not making the decisions in isolation, and it’s remembering you’re a board member and you’re ultimately just one of several people looking to get the best decision for the firm. And I think for me, I can bring the investment experience, but it’s also being comfortable having that drive to eliminate groupthink, because one of the main things you need to be asking yourself is, where could we be wrong? Being comfortable with dissent and realizing it’s not personal, it’s you’re coming to the best possible decision that you can. And I think that’s probably been the most interesting part for me, because you’re essentially bouncing ideas off each other, picking them apart, and then coming to a consensus or not. You won’t always come to a to a consensus, but it’s coming to an agreement in that manner. And I you think, know, for me, it’s being able to bring the investment experience and also the experience within sort of fintech more generally I find very, very interesting. And then probably finally, and it must sound pretty obvious, it’s always reading the board packs, having notes on your thoughts, and thinking about how to get that across concisely, which will make the meetings progress much quicker because actually A 2 or a 3-hour meeting might sound like a long time, but you have an incredible amount of work and information to get through and a lot of decisions to make and trying to be as concise as possible is always key.
Aoifinn Devitt: And before we move to some reflections, I’d love to know whether you have any, in your CIO role, any core investment beliefs on how they’ve evolved over time, anything that you stand by and bring to every role and even into those committee roles as well.
David: Yes. I mean, I think one of the best things that I’ve taken away from moving through the different industries is long-term investing needs to be for at least 5 years. Unfortunately, it’s quite boring to say, but those opportunities that are truly asymmetric in nature, such as when sterling crashed during COVID or when S&P 500 was at, say, 667, they don’t come along that often. And they also come along when it feels perhaps most uncomfortable. And I think, at least for me, it’s always challenge your own view, always picking it apart and understanding and being on top of the data because you can be sure that your clients are going to come in and pick apart your view for you. Equally, having, having a framework and sticking to it religiously doesn’t work. It’s having the flexibility. And when someone brings up a new approach or a new model or even a new tool, you need to understand, well, this is something I should incorporate into my toolkit. So for instance, learning to code. I’ve learned to code over the last 6, 7 years, which was never something I was particularly passionate about doing before, but I can see how useful it is. And I think some people would argue that the quantification of finance has gone too far. Some people would say it hasn’t gone far enough. And I think it’s just part of the change. And if it’s a tool that you can use, it can give you an edge, you should use it, but you shouldn’t just use it for its, its own sake. Finally, I’d say you need to read incredibly widely, and more importantly is to read what you disagree with than what agrees with you. It’s just that confirmation bias, which is maybe a tiny component of psychology, but it’s very easy just to read things and just feel, well, this is all fine. But actually, it’s reading the commentators and those strategists that you disagree with, just because they’re all in their roles because they’re smart and they’re informed. Markets don’t stay static and the world is going to be constantly evolving. There are going to be people who are ahead of you. There are going to be people behind of you, but that, that’s what keeps it interesting. And it’s just trying to stay, stay on top of that.
Aoifinn Devitt: It’s really interesting. And let’s just go back to some personal reflections. So given the career you’ve had and touching on fintech in such a meaningful way, were there any ups and downs there or any maybe lessons learned from perhaps ventures that didn’t succeed?
David: I’ve been fairly lucky in my career, so that the firms that I’ve been involved with have succeeded. Wealthify had just been majority acquired by Aviva when I joined. And so I think the thing that’s been probably the most interesting takeaway for me is understanding what you’re good at and what other people are good at and being able to learn from them on that. I mean, The best thing that I’ve found has been across changing industries is that it is difficult and they all have different focuses. And probably the downs are that it does take longer to adjust and get up to speed than you might want. But ultimately, they’ve hired you for the skills that you bring. So I think that’s been quite fortunate. And it probably is a fairly unique and broad array. So I think people will ask, well, which one do you prefer? And I think for me, it’s been fortunate enough to work with both smart, interesting, and passionate people. That’s been the highlight, really.
Aoifinn Devitt: You speak about passionate people. Were there any people throughout your trajectory that had a particular influence on you, or any mentors that you can mention?
David: So I think, not wanting to name names because I’ve never checked with them on this, I think the people who I found to be the best mentors sometimes don’t even realize that they are. They’ll just be giving you guidance and suggestions as they go along. But I think probably the person who’s always given me some of the best advice has actually been my wife and has always helped me frame my reflections and looking ahead and having those decisions. I think that I’ve been incredibly fortunate with that and probably moving to the US, obviously all my journeys, all my decisions that took me to the US took me there. That’s certainly been the best decision I’ve made. And obviously psychologists come back to, well, who you choose as your life partner really ends up determining an awful lot of how your, your life progresses.
Aoifinn Devitt: Well, I hope your wife wouldn’t mind you mentioning her on this podcast. I hope you have that understanding between you. When you look at words of wisdom or advice you’ve received, and with someone with a psychology background, I’m sure you do mull certain pieces of advice or even distill some of your own. Is there anything you can share there?
David: Probably the best bit of advice was, it’s wonderful having good ideas, but if you can’t communicate them well, then it doesn’t matter, and that’s not that useful. And then one of the other best bits of advice, which was from someone different, was you need to have a view in investing. If you don’t have a view, what are we employing you for? And I think that was, it was very much, you need to be informed, have an opinion and reason why you are stating what your outcome is expected to be. And it was very brutal, but it was incredibly fairly put because saying, well, these are the two things that could possibly happen isn’t really that helpful. If you’re saying these are the two things that could happen and I expect that the probability is 25% outcome A, 75% outcome B, and these are the reasons why. That’s much more interesting. So I think it’s having the backing of your opinions, but also appreciating what could go wrong with them. And I think that’s, that’s also something that I’m constantly trying to work on.
Aoifinn Devitt: And you mentioned reading widely. Where do you find that kind of opposite opinion, some of the counter to maybe your confirmation bias? Any particular sources that you find you go to over and over again?
David: So I think a lot of the asset managers put out very interesting pieces, particularly the more longer-term focused pieces. Equally, I think that actually the individual US Feds can put some interesting pieces out, but also it’s a lot of talking to my friends and former colleagues in the market who have an opinion and understanding what they’re worrying about, what they’re not. And I think there’s that, but it’s also sitting on the committees, getting the packs and talking to those people because they are also talking to other people. And so it’s almost that network and multiplier effect, which I feel I’m particularly lucky to have.
Aoifinn Devitt: And in terms of fintech and its advances, are there any go-to resources? Because as I said, it’s something we haven’t talked about enough. And I think we all need to be getting a little smarter on, especially as we look at what AI can do to our business and our relationships with our clients. And probably the retail client is perhaps the area most ripe for disruption. Any sort of go-to sources for fintech intelligence?
David: So it’s probably a bit hackneyed, but I actually find LinkedIn is an incredible resource for that because people will post something that they found interesting, they’ll say, well, yes, you can use ChatGPT for X, but actually here are 3 different similar products. And then I find that fortunately having lots of people who work in fintech, they will either like or comment on something and that’s much more up to date. So I don’t really use Twitter or Facebook. So LinkedIn is probably my most dynamic resource in that respect because I don’t really read sort of magazines on it, Crunchbase as a website is quite useful for that. But ultimately it’s really people and individuals sharing it on LinkedIn. So I still feel like LinkedIn is probably one of the more constructive social networks left in the world.
Aoifinn Devitt: Well, here, here, because that’s how we met. So I have to congratulate it there. And well, thank you so much, David. I was attracted to your posts on LinkedIn because they were extremely thoughtful, broad, and I think they did present that kind of discursive content that showed you do look at the opposite view. Which is often so rare. You offered us a window here into fintech and where it’s going, which is particularly useful. So thank you for coming here and sharing your insights with us.
David: Well, thank you very much for having me.
Aoifinn Devitt: I’m Aoifinn Devitt. Thank you for listening to the 50 Faces podcast. If you liked what you heard and would like to tune in to hear more inspiring investors and their personal journeys, please subscribe on Apple Podcasts, 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: Series 3 is kindly supported by Eagle Point Credit Management. Eagle Point Credit Management is a specialist investment manager principally focused on income-oriented credit investments in niche and inefficient markets. Founded by Thomas Majewski in partnership with Stone Point Capital in 2012, Eagle Point currently manages over $7.8 billion in AUM. Investment strategies pursued by the firm include collateralized loan obligations, CLOs, portfolio debt securities, and other opportunities across the credit universe. Currently, Eagle Point is the largest investor in CLO equity in the world and one of the largest non-bank lenders focused on providing financing solutions to credit funds. You can learn more about Eagle Point at eaglepointcredit.com. Our next guest is a CIO with unique insights into fintech. Find out from him what the latest advances mean and how integrating a human overlay in its use will be so critical. He’s also a strong advocate of having a view in the world of investing and of seeking out opposing views. 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 David Simmons, who is Chief Investment Officer at Cadro and an external investment committee member at Wealthify, where he was previously CIO. He holds additional investment committee and advisory roles and is an adjunct lecturer at Heriot-Watt University. Welcome, David. Thanks for joining me today.
David: Great. Thanks for having me.
Aoifinn Devitt: Well, let’s start with your background and career journey. Where did you grow up? What were your early interests and how did you come to enter the world of investing and finance?
David: So I grew up just outside of London. I was always pretty interested in how the world worked. So did maths, science, economics, and also actually psychology, which I studied at A-level. University, I did bachelor’s and master’s in economics, and actually I was on the path to do a PhD. So I had the 1+3 scholarship from Research Council. And but actually during the milk rounds, as it was called back then, I got a job with an emerging markets-focused bank called Standard Chartered, which was quite a bit smaller in the UK than it is now, but it obviously had a significant global presence in the fast-growing markets. Did a 2-year graduate program in London and then actually went to New York to work as a US economist back in 2007. I agreed to do that in the, the summer of 2007, just before everything started to get interesting.
Aoifinn Devitt: Well, I’m starting to see all the links now with some of your academic work, and I’m also going to hold that thought on the psychology piece because it may come up later when we talk a little bit about fintech. Talk us through your career then, once you entered and you ended up as a CIO with what you’re doing today. Were there any surprising turns along that path?
David: So, I mean, I think probably take it back to a bit before being the CIO. So left Standard Chartered as I was wrapping up my Executive MBA at University of Cambridge, which was an excellent experience. And then actually I moved to abroad to Paris to run an economics research team. So I don’t speak French, but went to work for a French firm in Paris. They’d been bought by a German firm, and the office environment was almost entirely in English. So this was ideal for them, having someone who didn’t speak French or German. It’s the first time I’d formally managed a team, very diverse team from Latin America, Africa, and Europe. But equally, it was really swapping the end of the telescope for me. So I’m going from being a single-country economist to being very globally focused, running a team, and actually trade credit they very much worry about what’s happening in the economy, but is it going up or down? Interest rates, inflation, and default rates, and then much more of a geopolitical overlay. So it’s sort of a very different path, complete swap really to what I was doing before. And actually, and again, it’s my own fault for not learning French, but it was quite hard to settle in France. So actually my wife and I returned back to London where I took a role working as a global macro investment strategist at HSBC. And that’s where I really got exposure to asset management, working with portfolio managers who were the key internal clients, and then also the various external clients. And then unsurprisingly, my, my focus there was the US, but very much how that fitted into the, the worldview. And what was probably useful was taking the sell-side experience, which is a lot more short-term, the insurance-focused experience, which is incredibly long-term, and kind of porting that into the buy-side, which is perhaps a bit more in between. And there’s a lot more focus on the balance of probability and what the markets is pricing within the buy side and asset management. And actually, after doing that in London for a couple of years, my wife and I decided we would move somewhere that we wanted to live rather than living somewhere for work. And we actually relocated up to Edinburgh, which was somewhere that we’d always been on holiday and always loved. And that was a very different move. Most people in finance will tend to move for work. And actually, once we’d had a bit of time out and settled in, you had the post-Brexit rapidly emerging asset management industry. So finding a role was perhaps harder than it would’ve been a few years previously. And that’s when I came across a role which was just advertised on LinkedIn to run investment strategy at Wealthify, who’d just been majority acquired by Aviva. And again, that was very different to what I had done previously, having worked for incredibly large companies with tens of thousands or maybe even hundreds of thousands of employees and going working for a startup fintech that had just under 30. Employees, and again, it was very focused, rapidly going, and they were really keen to open up investing to anyone, and you could do so from a pound. So very different environment. And again, know, you they were sort of interested in my skills and what I could bring. And for me, it was also you understanding, know, what I would have the opportunity to learn there as well.
Aoifinn Devitt: Can you talk about your move to Cadro?
David: So I’ve been fortunate over the years to have had several approaches via recruiters or LinkedIn. But I really wanted my next step to evolve my career and knowledge further. So when I spoke to Natasha Williams and Jordan Buck, who are the two co-founders of Cadro, I could see that they were looking to do something different and bring wealth management, and particularly the client communication element of that industry, into the 21st century. Now they’re doing this using an app smartly to keep clients updated and also at the same time bringing greater private market knowledge to the investing process. And that was really important for me because private markets was the gap in my experience. I’ve got extensive public market experience. I’ve even done some angel investing and crowdfunding over the years, but this was another exciting opportunity to build something. And it was the building that I also really enjoyed at And, Wealthfi. You know, we certainly had a fantastic time doing that at Cadro over the last year.
Aoifinn Devitt: Well, let’s dig in a little bit to that world of fintech because it’s not something we’ve actually talked about a lot on this podcast series, surprisingly. Can you tell us a little bit about the world of fintech? From your vantage point today and how you see it improving the investment landscape?
David: Certainly. So I mean, I think one of the most interesting things about fintech, which everyone thinks of being incredibly dynamic, is that part of it, at least the neo banks, are very much sparked by that old institution, the Bank of England, who were looking to increase innovation and competition. And I think they’ll be very pleased with the progress they’ve made there. And equally on the asset management side of things, It was very much born out of frustration with the existing investment firms’ apps. And I won’t name names, but most of the big firms don’t have, or at least a decade ago didn’t have particularly dynamic apps, whereas the fintech starting or wealth tech or even the regtech firms then were very quickly able to respond to client suggestions. And they also didn’t have the legacy systems that you were seeing. So they were able to be much more nimble. They were built purely for this purpose rather than necessarily trying to block together 3 or 4 different systems and come up with something. And I think that was one of the things that was particularly appealing about Wealthfy is that they were very much focused on bringing investment to everyone and making it accessible in the same way as if you are applying for a bank account at one of the challenger banks. They don’t have any branches. You have to do everything online. And again, there’s companies that have helped make that process easier. So when you do your identity check for whichever bank you are signing up for, the fact that you’ve got the phone in your pocket that lets you do all of that makes it incredibly easy to handle and to scale. And I think every time people find a problem with that process, you actually see either the individual fintech that I’m trying to solve it or go out and buy. So there’s very much a build or buy mentality. And I think that’s also one of the approaches that I like, is that it’s very much a problem-solving industry. And that’s really the focus that I think has been particularly interesting. And that’s also probably borne out because you’ve got a lot of people who are engineers and software engineers in particular, who are very problem-solving focused, and they are going to take that approach and fix what is in front of them. And I think that, you know, that has been something that’s been incredible to, to see, which I really wasn’t exposed to working in the banks or the insurance firms, because also, again, you didn’t have that high degree of people being able to code, which I think, again, over the last decade, you see a lot more people who are able to code in the banks who are coming forward to the front office, to the head of the firms, rather than being in the, the quant division.
Aoifinn Devitt: That’s really interesting, that focus on problem solving. And I’m also hearing there’s a certain dynamism, responsiveness, that kind of innovation that probably goes with the tech part of the fintech, perhaps less of the fin. And you mentioned you studied psychology. I’m not sure whether you use your psychology skills much in that role, but see— I’d I think there is certainly an evolution too in fintech around understanding the consumer, the customer psychology, and responding to that. How much of that did you see in practice?
David: Well, I think a lot of the, the interesting part has actually been the consumer testing, because ultimately, if you are trying to create a product that people want to use, you do have to test it and you do have to refine it. So I think that, that part has been particularly interesting. But also, if you think about the last decade, it’s only really the last 18 months, and then for a brief period in 2020 when markets have actually gone down. So there’s, there’s very much a communication element to the role over the last couple of years that maybe hasn’t been there previously. And I think it, it’s trying to put yourself in the investor’s shoes and help them you understand, know, that this is why this is occurring, this is what we’re, we’re doing about it. And markets haven’t necessarily been functioning as, as normal since the global financial crisis. And the recent corrections that we’ve been seeing are much more of a part of normalization rather than the, just the, the end of markets going up. I think it’s that you are going to see a repricing going forward. But if you haven’t seen that while you’ve been on your investing journey, it’s a very difficult thing to bear.
Aoifinn Devitt: It’s really interesting. And then just in terms of the crystal ball question, which I know is a difficult one, if you were to look 5 years hence, where do you think the conversations will be sort of centering when it comes to fintech? Some of this rollout of product, do you think we’ll be talking about more psychology-based coaching, or will we be looking at impact, investing with purpose? Where do you think we’re going to land?
David: So I think if you look at what’s happened over the last decade, obviously you’ve seen significant progress, but it’s still— you’ve got those young companies that are coming in and finding a niche and driving their advantage compared to the incumbent. But I think what’s most interesting going forward is that you’re probably going to see an increase both in personalization and in interactions, as you say, with some of the coaching element. And that’s starting to come through in some of the firms that you’re seeing now. But I think it’s the personalization part that I probably find most interesting, because I think if you look even just 5 years ago where we were with regards to ESG and sustainable investing, It’s moved very much from the sidelines to being a major component of what investors, both institutional and individuals, are demanding. But going forward, I feel that people would want to be able to exclude or include things according to their beliefs and judgments in their portfolio. And some of those are actually going to be much easier to do and also are going to be much more contentious. So for instance, if you look at nuclear power, Nuclear power tends to be a reasonable divider within the ESG space. Some people are pro, they see it as being one of the components of the future of energy, others less so. Similarly, alcohol can depend on who you ask. But things such as modern slavery and pollution, absolutely not. There’s no discussion about that. So I think it’s interesting that there are areas where there are discussions for which people might want to have personalization, and then you look at the components where there isn’t a discussion. Because we can all agree that we should be doing our best to tackle those. That’s where the area for pressure and progress that companies can agree on, and actually you can get individual investors more involved. And I think that’s when they’re interested, when they feel involved and they can see the difference that they’re making. And I think we’re still at a very early stage of that. You’re starting to see it a bit more in the US, but in the UK and Europe, you don’t really have the the depth of ETFs and mutual funds that allow that personalization. So you are unfortunately left with maybe a bit more of a cookie-cutter approach at present. But ultimately, what’s also very important for customers and investors and clients is that when you say you’re going to be excluding something, you exclude that. And I think that’s the thing that I very much enjoying the ESG space is talking to those portfolio managers who have got the commitment and they are doing the work and they’re investing in line both with their values, but also in the companies that they see as being a long-term positive investment.
Aoifinn Devitt: Really interesting that on the one hand, the US is more developed in terms of product, but I would suggest it’s not as developed in terms of this messaging and some of this movement. In some ways it’s actually, it’s not universally understood as being the way investors investment is done the way it might be, say, in Europe or Asia or Australia. I’d love to relate some of what you’re saying here about the industry and fintech to the work you do at Cadro and Wealthify. Can you tell us a little bit about how that comes in?
David: Certainly. So I’m currently sitting on the investment committee at Wealthify, where I was previously the CIO, and I’m CIO at Cadro, where I oversee the the investment process. So I think when you look at how we are approaching ESG investing, so for instance at Wealthify we exclude weapons, tobacco, gambling, and adult entertainment. And at Cadre, how we’re thinking about it is also as part of an input into our overall risk portfolio considerations. So I think that’s one of the things that that I really like is that you’re seeing established investors include it as a consideration from a governance perspective in their investment process. So even if you are not considering ESG as a major component, or you are not running an ESG fund, it’s still interesting to think about, well, how are these companies doing? Because those companies that have got a higher or more positive ESG score, you can expect them to avoid longevity issues. So for instance, if you’re a company and you’re taking aggressive action to lessen your carbon footprint by reducing your energy usage, that’s going to be saving you money. And I think to the point that the US isn’t maybe as, as agreed as we are in Europe of it being a valuable approach, I still think that there’s going to be that element of people can see, well, it’s an interesting factor and you should be including some of the elements in it, whether or not you want to actually have it as your overall approach. And some people just don’t like it having the restriction on their universe. And I think that that’s for them to decide, and that’s their investment offering. But I think the most important thing that I always feel with ESG and sustainable investing is that you are doing what you say you are doing, because you ultimately have to be investing with integrity or it’s simply going to be meaningless as a product.
Aoifinn Devitt: Absolutely. Or quickly, the cynicism will kick in, and I think then you lose the trust perhaps that you’ve taken so long to build. You sit on, you mentioned sitting on an investment committee, but you also sit on other investment committees, other boards, advisory or otherwise. What do you bring to those roles? What do you think makes a good, effective investment committee or board member?
David: Well, I think I sit on the other side of the fence most of the time, so I’ve got executive role at Cadro, which is the vast majority of my working days. But I think it’s sitting on that other side when you are there to provide constructive challenge to decisions and views. You’re really not the executive, you’re not making the decisions in isolation, and it’s remembering you’re a board member and you’re ultimately just one of several people looking to get the best decision for the firm. And I think for me, I can bring the investment experience, but it’s also being comfortable having that drive to eliminate groupthink, because one of the main things you need to be asking yourself is, where could we be wrong? Being comfortable with dissent and realizing it’s not personal, it’s you’re coming to the best possible decision that you can. And I think that’s probably been the most interesting part for me, because you’re essentially bouncing ideas off each other, picking them apart, and then coming to a consensus or not. You won’t always come to a to a consensus, but it’s coming to an agreement in that manner. And I you think, know, for me, it’s being able to bring the investment experience and also the experience within sort of fintech more generally I find very, very interesting. And then probably finally, and it must sound pretty obvious, it’s always reading the board packs, having notes on your thoughts, and thinking about how to get that across concisely, which will make the meetings progress much quicker because actually A 2 or a 3-hour meeting might sound like a long time, but you have an incredible amount of work and information to get through and a lot of decisions to make and trying to be as concise as possible is always key.
Aoifinn Devitt: And before we move to some reflections, I’d love to know whether you have any, in your CIO role, any core investment beliefs on how they’ve evolved over time, anything that you stand by and bring to every role and even into those committee roles as well.
David: Yes. I mean, I think one of the best things that I’ve taken away from moving through the different industries is long-term investing needs to be for at least 5 years. Unfortunately, it’s quite boring to say, but those opportunities that are truly asymmetric in nature, such as when sterling crashed during COVID or when S&P 500 was at, say, 667, they don’t come along that often. And they also come along when it feels perhaps most uncomfortable. And I think, at least for me, it’s always challenge your own view, always picking it apart and understanding and being on top of the data because you can be sure that your clients are going to come in and pick apart your view for you. Equally, having, having a framework and sticking to it religiously doesn’t work. It’s having the flexibility. And when someone brings up a new approach or a new model or even a new tool, you need to understand, well, this is something I should incorporate into my toolkit. So for instance, learning to code. I’ve learned to code over the last 6, 7 years, which was never something I was particularly passionate about doing before, but I can see how useful it is. And I think some people would argue that the quantification of finance has gone too far. Some people would say it hasn’t gone far enough. And I think it’s just part of the change. And if it’s a tool that you can use, it can give you an edge, you should use it, but you shouldn’t just use it for its, its own sake. Finally, I’d say you need to read incredibly widely, and more importantly is to read what you disagree with than what agrees with you. It’s just that confirmation bias, which is maybe a tiny component of psychology, but it’s very easy just to read things and just feel, well, this is all fine. But actually, it’s reading the commentators and those strategists that you disagree with, just because they’re all in their roles because they’re smart and they’re informed. Markets don’t stay static and the world is going to be constantly evolving. There are going to be people who are ahead of you. There are going to be people behind of you, but that, that’s what keeps it interesting. And it’s just trying to stay, stay on top of that.
Aoifinn Devitt: It’s really interesting. And let’s just go back to some personal reflections. So given the career you’ve had and touching on fintech in such a meaningful way, were there any ups and downs there or any maybe lessons learned from perhaps ventures that didn’t succeed?
David: I’ve been fairly lucky in my career, so that the firms that I’ve been involved with have succeeded. Wealthify had just been majority acquired by Aviva when I joined. And so I think the thing that’s been probably the most interesting takeaway for me is understanding what you’re good at and what other people are good at and being able to learn from them on that. I mean, The best thing that I’ve found has been across changing industries is that it is difficult and they all have different focuses. And probably the downs are that it does take longer to adjust and get up to speed than you might want. But ultimately, they’ve hired you for the skills that you bring. So I think that’s been quite fortunate. And it probably is a fairly unique and broad array. So I think people will ask, well, which one do you prefer? And I think for me, it’s been fortunate enough to work with both smart, interesting, and passionate people. That’s been the highlight, really.
Aoifinn Devitt: You speak about passionate people. Were there any people throughout your trajectory that had a particular influence on you, or any mentors that you can mention?
David: So I think, not wanting to name names because I’ve never checked with them on this, I think the people who I found to be the best mentors sometimes don’t even realize that they are. They’ll just be giving you guidance and suggestions as they go along. But I think probably the person who’s always given me some of the best advice has actually been my wife and has always helped me frame my reflections and looking ahead and having those decisions. I think that I’ve been incredibly fortunate with that and probably moving to the US, obviously all my journeys, all my decisions that took me to the US took me there. That’s certainly been the best decision I’ve made. And obviously psychologists come back to, well, who you choose as your life partner really ends up determining an awful lot of how your, your life progresses.
Aoifinn Devitt: Well, I hope your wife wouldn’t mind you mentioning her on this podcast. I hope you have that understanding between you. When you look at words of wisdom or advice you’ve received, and with someone with a psychology background, I’m sure you do mull certain pieces of advice or even distill some of your own. Is there anything you can share there?
David: Probably the best bit of advice was, it’s wonderful having good ideas, but if you can’t communicate them well, then it doesn’t matter, and that’s not that useful. And then one of the other best bits of advice, which was from someone different, was you need to have a view in investing. If you don’t have a view, what are we employing you for? And I think that was, it was very much, you need to be informed, have an opinion and reason why you are stating what your outcome is expected to be. And it was very brutal, but it was incredibly fairly put because saying, well, these are the two things that could possibly happen isn’t really that helpful. If you’re saying these are the two things that could happen and I expect that the probability is 25% outcome A, 75% outcome B, and these are the reasons why. That’s much more interesting. So I think it’s having the backing of your opinions, but also appreciating what could go wrong with them. And I think that’s, that’s also something that I’m constantly trying to work on.
Aoifinn Devitt: And you mentioned reading widely. Where do you find that kind of opposite opinion, some of the counter to maybe your confirmation bias? Any particular sources that you find you go to over and over again?
David: So I think a lot of the asset managers put out very interesting pieces, particularly the more longer-term focused pieces. Equally, I think that actually the individual US Feds can put some interesting pieces out, but also it’s a lot of talking to my friends and former colleagues in the market who have an opinion and understanding what they’re worrying about, what they’re not. And I think there’s that, but it’s also sitting on the committees, getting the packs and talking to those people because they are also talking to other people. And so it’s almost that network and multiplier effect, which I feel I’m particularly lucky to have.
Aoifinn Devitt: And in terms of fintech and its advances, are there any go-to resources? Because as I said, it’s something we haven’t talked about enough. And I think we all need to be getting a little smarter on, especially as we look at what AI can do to our business and our relationships with our clients. And probably the retail client is perhaps the area most ripe for disruption. Any sort of go-to sources for fintech intelligence?
David: So it’s probably a bit hackneyed, but I actually find LinkedIn is an incredible resource for that because people will post something that they found interesting, they’ll say, well, yes, you can use ChatGPT for X, but actually here are 3 different similar products. And then I find that fortunately having lots of people who work in fintech, they will either like or comment on something and that’s much more up to date. So I don’t really use Twitter or Facebook. So LinkedIn is probably my most dynamic resource in that respect because I don’t really read sort of magazines on it, Crunchbase as a website is quite useful for that. But ultimately it’s really people and individuals sharing it on LinkedIn. So I still feel like LinkedIn is probably one of the more constructive social networks left in the world.
Aoifinn Devitt: Well, here, here, because that’s how we met. So I have to congratulate it there. And well, thank you so much, David. I was attracted to your posts on LinkedIn because they were extremely thoughtful, broad, and I think they did present that kind of discursive content that showed you do look at the opposite view. Which is often so rare. You offered us a window here into fintech and where it’s going, which is particularly useful. So thank you for coming here and sharing your insights with us.
David: Well, thank you very much for having me.
Aoifinn Devitt: I’m Aoifinn Devitt. Thank you for listening to the 50 Faces podcast. If you liked what you heard and would like to tune in to hear more inspiring investors and their personal journeys, please subscribe on Apple Podcasts, 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.
