Part 2


"Being able to operate on your own, but also operate well with other people is important"

About Lorna

Lorna is an Analyst with the Sustainable Funds Group at Stewart Investors. She joined the team in July 2017. Previously, Lorna worked in various strategy, project and responsible investment roles at Colonial First State Global Asset Management (now First Sentier Investors), and prior to that, worked as a management consultant. Lorna holds a Masters degree in Sustainability Leadership from the University of Cambridge and a BA (Hons) in Business and Psychology from the University of Strathclyde.



Gillian  0:06  
Hi, I'm Gillian!


Sophie  0:07  
And I'm Sophie. And you're listening to Breaking Through Careers: Investment Management Edition with Future Asset, where we demystify the industry that is Investment Management.


Gillian  0:16  
Each episode we explore a new asset class or role to find out what our guest does on a day to day basis and what they did in order to get there.


Sophie  0:23  
We'll also be joined by a keen school student each episode to help ask the questions you want to know the answers to. 


Gillian  0:29  
Do you need to study economics at a certain university to get into Investment Management?


Sophie  0:32  
What's the difference between active and passive.....


Gillian  0:35  
Quam funds? Indices? Can you please speak normal English!


Sophie  0:37  
I thought you need to be posh to work in investments, no?


Gillian  0:39  
On a scale of 1-10 how boring would you say.... 


Sophie  0:42  
Am I going to need to get a pinstripe suit?


Gillian  0:45  
Welcome to Part Two of the Sustainable Funds Equity Investor. In Part One, Lorna told us how and why her dreams to become a vet came to an abrupt end, she told us what ESG stands for, and she let us know how her route differed from what was laid out for her in the school careers test.


Quick Fire Round

Erin  1:04  
Is it necessary to go to university to become an investment analyst working on sustainable funds?


Lorna  1:11  
If I look at everybody that I know in the industry, I would say most people have got a university degree. That's not to say that that has to be the case or will continue to be the case. I was actually listening to a podcast last night of one of the biggest innovative and well known funds in the US, and they were talking about really trying to move away from that model. They were hiring somebody from a completely different industry with a completely different background, I can't quite remember, but I'm sure they didn't have a university degree. So I think although historically, that's been the case that you would need that. And you do need some qualifications, of course. So the investment management certificates and various different things that you need to be able to manage other people's money, you have to have formal, related certificates. But I think getting into the industry, it might not be as much of a prerequisite as it always has been in the past.


Sophie  1:59  
I definitely think that that is something that is changing, which is good to see. And it's really great to hear you talking about how you've had experience in other industries. And that's transferred so well into what you're doing now. Because I definitely think that sometimes people think that you just wake up one day, when you're in Troon, when you're young, say you're going to do it and then suddenly, one day you're doing it. That's great to hear the journey. And it does sound like from what you said already that it's interesting, the kind of work that you're doing. So could you just tell us what an average day at work looks like for you? 


Lorna  2:28  
Yeah, sure. So I'd say that there's probably no two days that are even vaguely similar, every day is completely different. So our team is located in four different regions: Sydney, Singapore, London, and Edinburgh. And so, the teams that were working together, although COVID has been quite a shock to a number of people. For us, it's not been that much of a shock, because we're used to working quite virtually and away from other parts of the business. So there's a relatively small team in Edinburgh, and we work very closely, but we also work closely with the rest of the people on the other side of the world. So we do have some early morning calls with Australia. So I do tend to start work a little bit earlier. My typical day comprises of... well, if I break down the rule into a few different bits, it can be doing any of these different things. So it could be working on analysing companies, which is the the bulk of the role. So that might be meeting with CFOs, or CEOs of companies to understand more about their business, their strategy, how they think, how they operate. It might be doing work by myself to analyse the company: reading through annual reports and news items on the company. It might be writing up reports from my meetings, and presenting it to the team to get their views on whether they think the company is worth investing in. So that's the analysis part of it. And sustainability is very much built into that. So trying to understand the sustainability positioning of the company, are they actually providing a positive impact on the world or not? The second part of the job is engagement. So we engage with companies quite a lot on all sorts of topics to try to get them to improve in whatever areas we think they could improve on, whether that's their diversity, whether that's their executive remuneration, whether that's their approach to climate change, or their plastic packaging. So whatever we think is relevant for that company, we will engage with them and try to understand their points of views and encourage them to do more. Client work is a big part of the rule as well. So the people that invest in our funds would be family offices, it might be pension funds, it might be insurance companies, it could be charities, and they want to know how their investments are going. And they want to know the types of companies that we're investing in and find out a bit about what we're thinking in terms of the portfolio and the companies and the markets and what we're doing. So giving client updates is another big part of the role as well. And then just the team debate, there's a lot of team debate all the time, we've got a very flat hierarchy. So everyone's involved in the investment decision making process. And it's a very collegiate process. So there's just constant dialogue between the team, team meetings, email, Teams, whatever, there's just stuff going on all the time. And so every day is different, every day is interesting, every day is a school day for me, I'm still learning every single day. But that's what keeps me loving it and enjoying it and I hope to stick around in the industry for a long time. Because it's something that you could never get bored with, you will never understand everything about all companies, what's going on in the market, what's happening in the news, there's just constant newsflow all the time. And so you're always learning and that's what I find most enjoyable. 


Sophie  5:21  
Such a diverse day! Each day when you go in. And I guess that's great that you get a balance, you work with people in different cultures, you work across different companies or sectors, industries, just getting such a wide range of exposure to how the world works, I guess!


Lorna  5:36  
It's really amazing. So one day, we might be talking to a CEO of a personal care company in India, or we might be talking to the CEO of Unilever, the next day. Or we might be talking to a board member of a company in the US. So it's always talking to different people, finding out what's going on with them, learning about what's going on in the market, what's going on in their companies. It's just fascinating and travel is a big part of it as well. Normally, we would be travelling to see the companies on their own sites to meet with the people face to face and really get to know them.


Erin  6:06  
You mentioned that one of the things you like about your job is the fact that it's challenging and keeps you on your toes. But what is the thing that you find the most challenging about your job? 


Lorna  6:15  
Yeah, that's a good question. I think when you really think about what you're doing on a day to day basis, you've got a huge amount of responsibility on your shoulders. Because the people who are investing in your funds have worked very, very hard for their money, and they're now investing that in the hope that they will get a good return on investment, and the investment performance will be very good. And so when I do an assessment of a company and I produce a report, I send that to the team. I then have to present that to the team and we debate whether it's a good investment or not. If that investment then goes into the fund, that can have a huge influence on the performance of the portfolio, if it goes well, if it doesn't go well. And so when you think quite deeply about the responsibility that's on your shoulders to make sure that you're doing a good job for the people who are trusting you to look after their money.... I mean, it's a great thing that people do that. But it's just something that you're always conscious of that you want to make sure that you're doing your best for the end client.


Sophie  7:18  
I heard a bit already, where we talked about some of the skills that you work with on a day to day basis. But what do you think are the skills that you really need to have if you want to be an equity investor?


Lorna  7:29  
Yes, I think you need to be versatile in your approach to how you work. So as I say, every day is different, there's always lots of different things coming in, and lots of different requests of your time. And so to be able to, not multitask, but to be able to do lots of different things, maybe concurrently, can be a good thing! And also just the ability to work with the team, but also to work well on your own as well. I mean, quite a bit of the job is analysis. And so you're working on your own to assess whether a company is a good company or not. But at the same time, you're working very closely with your team to debate ideas with them. And you're also in front of clients and in front of companies. So just being able to sort of operate on your own, but also operate well with other people I think is important.


Sophie  8:18  
I think that's really good that you've touched on the people skills aspect of this. I mean, earlier on - a woman after my own heart, saying that you did some of your studies towards HR. And quite often I do hear that people say: "Oh, well, I like people. So I should go work in HR." And as much as I'd love everyone to come and be in the profession that I've chosen, I really think that those skills can be used everywhere. So it's really great to hear you advocating for that within the investments sphere as well.


Lorna  8:44  
Yeah. And I think going forward, hopefully the investment industry is changing and is becoming more diverse and is becoming more collaborative. Our team structure works really well in that respect , it is not the sort of all traditional style, where you'll have a portfolio manager who makes all the decisions. Then you'll have all the workers, the analysts that beaver away and do stuff, but then they're ignored or maybe they might have some influence in some way. But it's very hierarchical. We're much more flat, we're much more collegiate. And so I think maybe the skill set is slightly different going forward than what it has been in the past.


Gillian  9:23  
So I'm almost a bit scared to ask this question, because you mentioned early morning calls with the team down under! But

what are your typical working hours and what would you typically wear to work?


Lorna  9:32  
Well, at the moment, there has been occasions where I have been in my pyjamas on my bottom half! Nobody knows it's fine! But no, the job is wonderful from that respect, because it's completely flexible. It's not a typical 9am - 5pm where you have to be in an office or you have to be in a shop or you have to be somewhere in those hours. I mean, markets are open all around the world at different times. And our job is to invest in companies for the very long term so we're not in a rush to be daytraders and we have to get trades on today and that sort of thing. So our jobs can be very flexible in terms of the hours that they work, I have two small children and so that's great for me, because I can put them to bed and I can work early or I can work late, I can work whenever really. So my typical day... I mean, the early mornings with Australia is not too bad. I mean, at the moment, early morning calls with them start at 8am or 8:30am. So not too bad. And I would typically sort of work until about 5pm, but I would have breaks during the day to look after the children. Then I would feed the children, put them to bed, and then maybe do a little bit in the evening as well. But try not to, just quite flexible.


Erin  10:36  
What do you wish you'd known before you started your first job? 


Lorna  10:40  
I wish I had known not to stress so much about what I was going to end up being. I was obsessed at school about getting work experience and at university: I've got to get work experience, I've got to know what I want, I've got to have this path and I'm going to end up doing this thing which changed every six months. I really worried about that. And I wish I hadn't because the way that my career has panned out has been so random. It's been a case of taking opportunities as and when they came and working with those opportunities. Rather than having an end goal in mind. And trying to work towards that goal. I think that's helpful to have a sort of rough plan if you know what you want. But I've thankfully ended up in a role that I really love kind of through chance. I had no idea what investment management was, or sustainability when I first was at university. I was interested in all those environmental things, but I didn't know that investment management and sustainability was a thing. So I think I would just try to say to myself, to not stress out so much, and to just sort of trust the process. And if you're interested in something, just make sure that you keep that front of mind and try to focus on what interests you, rather than what you think you should be doing. 

Myth Busting


Sophie  11:46  
I think that's sage advice for all of us to take under our belts, especially when it can feel a bit stressful at the moment. I guess next up is what I think is probably one of the most important parts of what this podcast is all about. We're going to talk about myth busting. So in this section, we're really trying to tackle the stereotypes that are associated with the industry, and using some challenging and sometimes controversial statements to get out of you whether you think things are myth or fact. So for each of the questions I'm going to go through just now, I want you to tell us whether you think it's a myth or a fact, based on the experience that you've had in the industry. First up: "Ethics and ESG are the same thing." Myth or fact?


Lorna  12:28  
Myth. Do you want me to explain why? 


Sophie  12:31  
Yes please. 


Lorna  12:33  
So ethical investing is quite different. So that tends to be based on moral and ethical principles. So typically it is associated with funds that screen out the sin stocks I mentioned earlier: tobacco gambling, fossil fuel companies, alcohol companies, that sort of thing. So it tends to have a ethical lens, where you just negatively screen out those stocks. ESG is more about integrating environmental, social and governance factors into your investment decision making process. So less about negatively screening out stocks and more about having a more holistic view on the companies and the risks and the opportunities that ESG provides.


Gillian  13:09  
"The term ESG investing is just a smokescreen, people use the term to get more money from clients and investors don't actually make a positive impact on the world." Myth or fact?


Lorna  13:18  
Haha that's a good one. I think some investors definitely do this, there's been a huge rise recently in ESG investing, everyone is now on the bandwagon. And some people do it really, really well, and integrate ESG into their investment process and care about investing in good quality companies. Then there's a number of investors sadly, that have never considered this in the past, but now see that it's a very popular area of growth in the investment industry, and still have their same process, but just add on a quick tick in the box that they've thought about ESG in some way, shape, or form. So it's a bit of a problem in the industry at the moment and differentiating between the ones who really do it properly and the ones that don't, can be an issue for some people. 


Gillian  14:04  
And how are clients supposed to differentiate between those who are a bit more genuine about it? 


Lorna  14:09  
Yeah, I mean, you could simply have a look at the companies that are in the portfolio. I mean, just to give you a good example. So the Dow Jones Sustainability Index, a lot of people would think that that is a great index to look at to understand if a company is a good sustainability company or not. I disagree with that. So British American Tobacco has been a leader on the Dow Jones Sustainability Index for over 20 years now. So for me, first and foremost, you should look at what the companies are that are in the portfolio. Do they look like they're companies that are actually providing a positive role in the world? Or are they just companies that tick an ESG box and they've got a nice fancy sustainability report that says they've got lots of policies and so they score highly on an ESG score, we very much don't look at those scores. We have a much more qualitative assessment process. And so it's really just trying to understand the process behind that investment manager - how they think about sustainability, how they integrate it into their process, or whether it's just a simple tick in the box. And you can see that by looking at the companies that are in the portfolios. 


Erin  15:09  
"You don't actually need to sacrifice profits in order to invest sustainably." Myth or fact?


Lorna  15:16  
Fact. Yeah so this is what I was saying earlier about how the industry has completely changed. So previously, almost everybody thought that you needed to sacrifice profits in order to invest sustainably and now, almost nobody thinks that anymore. We very much believe that investing sustainably is a key driver of investment performance, it reduces risks, it increases your opportunities, and it's not a trade off to performance at all.


Sophie  15:40  
I think this is quite a common misconception. "Everyone who works in investments is posh, white and privately educated." Myth or fact?


Lorna  15:50  
It is definitely a myth. I'm not posh, definitely not posh, I hope you don't think I'm posh! I am white, but I'm not privately educated. If I take our team, we've got a mixture of backgrounds, a mixture of privately educated, publicly educated, we've got a mixture of races, I don't think any of us are posh. So hopefully that's a thing of the past!


Gillian  16:12  
"The investments working environment is cutthroat and aggressive as seen on TV shows like Billion." Myth or fact?


Lorna  16:19  
Myth! Not at all. Again, maybe in the past, it probably was. And I think also there was probably a bit of a split between the buy side and the sell side. I think the sell side, so the investment banks, always had the reputation of being quite cutthroat and aggressive. And asset management, which is the stuff that we do, was always seen as a little bit more friendly. That was a while ago, now investment management is not cutthroat and aggressive. Certainly not at Stewart Investors, we are as friendly and as collegiate as you can get.


Erin  16:46  
"Jobs in investments are boring and repetitive." Myth or fact?


Lorna  16:50  
Definite myth. Hopefully I've busted that myth from what I've said so far. I think I probably would have thought that they were boring and repetitive before going into the industry and before seeing what I do on a day to day basis. I mean, you do typically imagine somebody typing away on a spreadsheet and just not talking to anybody all day and pumping out company reports and analysis. That's certainly not my day job. And it's not the day job that I see in many places.


Looking Forward

Gillian  17:20  
Fab! Moving onto our final section, which is called Looking Forward, and essentially we're going to try and give Erin some really specific advice on how she can get to where you are today.


Erin  17:29  
Why should I join the investment management industry?


Lorna  17:34  
I would say because it's really fun. It's different every day, you learn every day, you meet great people, you get to travel, and you get to do something that can have a positive influence on the companies that you're investing in. And hopefully for the clients that are investing in your funds as well.


Sophie  17:50  
Why do you think Erin should work in sustainable or ESG investing?


Lorna  17:55  
I think it's not often that you get to have a really fun and great job that can have a positive impact on the world as well. So I mean, our purpose is to try and influence companies to be more sustainable. And so if you have an interest in the world being a more sustainable place for future generations, then it's definitely something that you should be getting into.


Gillian  18:16  
And why should Erin join Stewart Investors in particular, what makes you different from your competitors down the road?


Lorna  18:23  
I think maybe our culture and our team and our ethos is a key selling point. I mean, I love our team, I think our team is great. I think we wouldn't be able to work across four different locations if we weren't such a tight knit group of people. We work hard at making sure that the team stays tight like that, and making sure that we communicate all the time. The flat structure as well, so that lack of traditional hierarchy and just having everybody very highly empowered to be involved in the decision making, to be involved in the client work, to be involved in the engagement work. And everyone is a sustainability analyst. We don't have a separate team that does that for us. Everybody is very passionate about it and it's

just a nice environment to work within.


Erin  19:08  
Now that you've persuaded me to do sustainable investing at Stewart Investors, what three pieces of advice would you give me to help me get to where you are now?


Lorna  19:18  
Ooo three pieces of advice... Okay, so the first one would be, be bold! So do things that make you afraid and take opportunities that come your way, and not worry about making the right decision and having your plan completely planned out for the next 10 years. I mean, it took me over 10 years from when I graduated to getting started as an investment analyst. And so just not to worry too much. I think also maybe just trying to have something that's slightly different about you. Maybe having some sort of edge. And so I guess my edge getting into sustainable investing was having that Master's and that formal study within that area. I'm not saying that that's something that everybody needs to have, but just having some experience or some study or something that's maybe slightly different and sets you apart from everybody else who's coming into the industry that might come from the same background.


Gillian  20:09  
Wonderful. Thank you so much, Lorna. And honestly, fish farming is a very respectable profession. But I'm very glad you came into investment management. 


Lorna  20:21  
Thanks for having me. I hope we've convinced you, Erin!


Erin  20:24  
Yes, very convinced. You've managed to put my mind, and I feel like a lot of other people's minds, at rest about the stress of choosing the career path you want to go down now. And ending up in investments or ending up in another role in that industry. But just to stick with what you enjoy, and see where it takes you is a really good piece of advice. And if it takes you into investing, like I've learned, would be great because it seems like a good career path to go in, after listening to all of the choice you've mentioned. 


Lorna  20:58  
Oh good I'm pleased - Yay!


Gillian  21:03  
Job done!


Sophie  21:06  
Thanks for listening. Please join us again next episode as we hear some more tricks, learn some more jargon and bust some more myths.


Gillian  21:14  
Don't forget to subscribe to the core Breaking Through Careers podcast, via your podcast app of choice and check out the website at www.breakingthroughcareers.org


Sophie  21:23  
Catch you next episode.


Gillian  21:26  
If you enjoyed this episode and would like to see us back for another season, please drop us a review on iTunes. See you

next episode.