Part 1

Small_Cap_Equity_Investor_no background.

"It's okay to not know absolutely everything and it's okay to make mistakes, learn from them."

About Anjli

Anjli Shah is an Investment Director on the Smaller Companies Team at Aberdeen Standard Investments. She is the co-manager on the Global Mid-Cap Strategy and provides research support on US Small and Mid-Cap Equities. Anjli joined Standard Life Investments in January 2016 from Stifel (previously Oriel Securities) where she was an Equity Research Analyst. Prior to this, she was a Banks Analyst for the Prudential Regulation Authority (PRA), Bank of England for 2010-2014. Anjli has 5 years’ experience at ASI and 10+ years industry experience. She has BSc (Hons) in Economics from The University of Warwick, CFA and IMC.



Anjli  0:00  
That's one thing I really enjoy is you go out and you meet so many interesting people. I love, love, love monopoly, I will play to the bitter end, and never accept that I've lost. Doing work experience is really helpful because it gives you an insight into how that industry is, how that company operates, what the culture of that company is, and you also get exposure to people who are working in that industry. I think if you like being challenged if you like learning, this is definitely the industry for you. Because no day is the same. 


Gillian  0:45  
Hi, I'm Gillian.


Sophie  0:46  
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  0:55  
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  1:02  
We'll also be joined by a keen school student each episode to help us the question you want to know the answers to.


Gillian  1:08  
Do you need to study economics at a certain university to get into Investment Management?


Sophie  1:11  
What's the difference between active and passive investment? 


Gillian  1:14  
Quam funds? Indices? Can you please speak normal English! 


Sophie  1:17  
I thought you had to be posh to work in Investment Management? 


Gillian  1:19  
On a scale of 1-10? How boring would you say...


Sophie  1:21  
Am I going to need to get a pinstripe suit?


Gillian  1:25  
Today we're gonna welcome Anjli, a smaller company's equity investment director from Aberdeen Standard Investments.


Amy  1:31  
In this episode, she is going to tell us what the difference between investment banking and investment management is. She's then going to talk us through an average day of her life at work. And she's going to tell us that the movies are not always the same.


Gillian  1:46  
So today we're asking what is small cap equity investing? And how does a person find themselves doing that as a day job? Today, I'm joined by my series special co-host Sophie. 


Sophie  1:55  
Hey, Gillian.  


Gillian  1:56  
And this week, our guest co-host is Amy from Glenwood High School. Welcome, Amy.


Amy  2:00  
Hi, guys. How are you?


Sophie  2:02  
I'm doing great thanks. How are you both?


Amy  2:04  
I'm good.


Gillian  2:05  
So what do both of you know about smaller companies investing? 


Sophie  2:09  
So I don't know much. But one of the first jobs I had on my apprenticeship was working in performance calculation. And I remember seeing smaller companies as some of the funds that I would have to look at the performance of and I just remember thinking there's nothing small about them at all. They were talking about like millions. And I was like: "How can that be?". So I'm interested to learn more.


Amy  2:30  
And I'm starting from a blank piece of paper. I know nothing. 


Gillian  2:34  
That's okay. That's exactly what we're here for. So what in particular are you looking forward to learning today?


Sophie  2:39  
I'm most excited to hear about how this type of equity investing is maybe different to what we've heard and the other

weeks so far.


Amy  2:47  
I'm looking forward to finding out how she actually came about getting the job because I don't think it's a normal job that you'd grew up wanting to do, rather one that you'd find your way into.


Gillian  2:57  
Absolutely. So I think it's time to welcome Anjli. Hey, Anjli, how are you?


Anjli  3:05  
Hi, I'm well, thank you. How are you? 


Gillian  3:08  
Wonderful. Thanks. Thank you so much for coming onto our podcast. 


Anjli  3:11  
No problem at all. Happy to be here.

Quick Fire Round

Gillian  3:14  
Great. So we'll dive straight into our first section, which is called the Quick Fire Round. And we're basically going to ask you a bunch of super random questions. And you've got to answer as quickly as possible with the first answer that comes into your mind. Are you ready?


Anjli  3:28  
Yes, go for it.


Gillian  3:30  
Great. Pepsi or Coke? 


Anjli  3:32  


Sophie  3:33  
Coolest place you've ever visited?


Anjli  3:36  
That one's so hard, I love so many places...Vietnam, or Japan.


Amy  3:43  
Would you rather be too hot or too cold? 


Anjli  3:45  
Too cold.


Gillian  3:49  
Oh, I can't. I can't. Oh, gosh. 


Anjli  3:53  
The logic to that is that, like you can at least layer up and just look like a penguin with all your layers. Whereas if you're too hot, there's only so much you can do.


Gillian  4:04  
That is true. That is true. Did you go to a government school or a private school?


Anjli  4:09  
I went to a government school.


Sophie  4:11  
If you won a million pounds, what would you buy?


Anjli  4:14  
Can I say my fund or no? That's not allowed, is it?


Sophie  4:19  
Would that be frowned upon?


Anjli  4:22  
Oh, gosh, well, I actually just bought a flat but have no furniture so probably could do with buying some furniture,

although a million pounds is a bit excessive for that.


Gillian  4:32  
You could buy a lot of Ikea!


Anjli  4:34  
Yeah, exactly like I'd have to like goldleaf everything I think, which would be really tacky.


About you


Sophie  4:45  
The next section is all about you. Actually, we just want to know more about how you've gotten to where you are today. So we're going to start with where are you from and what city do you live in?


Anjli  4:54  
Okay, so I was born in London and grew up there, but I currently live in Edinburgh.


Gillian  5:01  
Why did you agree to come on to our podcast?


Anjli  5:03  
Because actually, I read some really interesting statistics now, like, they might not be entirely accurate, but from what I read that less than 15% of fund managers globally are females, which is really shocking when you consider that we make up about 50% of the population. And I think a lot of people when they think of investments, they think of it as being very male-dominated, or perhaps not appealing. So I want to really dispel any myths and encourage more young females to pursue this as a career choice.


Gillian  5:36  
Absolutely. Well, we've got a whole myth busting section, so I can't wait. It's one of my favourites.


Amy  5:42  
What is your job? And what kind of investment firm do you work for?


Anjli  5:45  
So I am a fund manager, and I work for an asset management company called Aberdeen Standard Investments.


Sophie  5:55  
And back when you were a youngster down in London, Anjli, did you always know that you were going to grow up to be a fund manager? Or what did you think you were going to be when you were at school?


Anjli  6:04  
I don't think I even knew what a fund manager was at that age. I just, I was saying to the guys last time, actually that I love, love, love monopoly, I will play to the bitter end and never accept that I've lost. Just love that game. I think from a young age, I really enjoyed finance. I'd like the idea of buying and selling, negotiating. And then as time went on, and I grew up, I kind of narrowed down that I wanted to work in financial services of some kind, because I like the variety. I like the pace, the challenge. And then as time has gone on, I've just kind of narrowed down the focus within financial services.


Sophie  6:46  
So monopoly is good preparation for entering into the industry.


Anjli  6:51  
Exactly. Like you know, you've got to work out is the purple worth trading for those yellows. You know, sometimes it's better to go with the lower colours, but then be able to buy and like build the hotels quicker. So you actually get rent.


Sophie  7:07  
Two-fold: a game-advice podcast and career advice podcast.


Anjli  7:11  
Absolutely. They go hand in hand.


Gillian  7:14  
I always love the oranges. I always love having the oranges I must say.


Anjli  7:19  
Oh, yeah, and the stations are usually pretty good.


Gillian  7:22  
I always get caught out on the stations. It's like, you know, when you just don't have that 200 pounds to pay when you're just about die? And you're like, surely not I missed the hotel. I'm like: "Yes, I missed the hotel." And then you realise that one person has all four stations!


Anjli  7:36  
Often overlooked, but actually a hidden gem, much like stock picking.


Gillian  7:44  
Okay, so aside from being a monopoly lover, what kind of kid were you?


Anjli  7:48  
So I would say I was pretty studious, hardworking, but also quite inquisitive about the world. I think my favourite question was why? And yeah, I just like had a broad range of interests and quite a broad circle of friends. Pretty cheeky, as well. I have a sense of humour. So yeah, pretty, pretty mixed individual I would say.


Gillian  8:11  
I bet your parents loved you. "Why? Why? Why?"


Anjli  8:15  
Exactly something like that!


Amy  8:19  
What do you think your unique skills are that have helped you to become successful?


Anjli  8:24  
So I would say that I'm pretty analytical. I think that's true. Like, even when, say, your friends are debating something that they've seen in the news, etc. I like to hear both sides of the story, weigh it up and kind of make my own mind up. I'm pretty inquisitive. So as I just said, I like learning and understanding why about something. And I think I'm pretty pro-active, as well. So kind of this industry is perhaps not the most diverse or it's not as diverse as it should be. But I don't think that should be a barrier. And I think the limit of your success is the limit of your ambition. So it's up to you to go out and grab it.


Gillian  9:05  
So wise!


Sophie  9:08  
And I guess what you're saying, from your experience, you know, going out and grabbing it and getting involved in the industry. What do you think have been some of the key resources and tools that you've had to hand to help you on your journey and to where you are today?


Anjli  9:21  
Yeah, so I would say, for me, there wasn't one standout thing, or one big blockbuster kind of button that I could hit and it was all fine thereafter. I think it was just a series of events along the way. So I think when I was in university, I signed up with SEO London, which is a charity that helps people from lower socio-economic backgrounds break into professional industries like investment banking, or asset management. And as part of that programme, I was assigned a mentor, and a buddy who were currently working in financial services. They offered things like training courses, like financial modelling and even things like how to build a pitch book on PowerPoint. So I thought that was all really helpful. And then the other thing that I found quite helpful maybe I'm not allowed to say this, because it's always like a no-no, isn't it but.... Wikipedia and Investopedia are all wonderful things. Obviously, you can Google everything, you know, when someone's talking in jargon, and you have no idea what they're talking about on a corporate website, you can just go in and Google: "Okay, what does this mean? And how is it worked out?" So I thought that was quite handy as a kind of dictionary of how to understand what people are talking about. And then I would say other things were just things like doing internships along the way, and just meeting some really inspirational colleagues and people who, even though it was unofficial, because they were so knowledgeable, just passed on their skill set and knowledge onto me, the good people that I've worked with. And I think those are the things that have made a difference.


Sophie  11:00  
And I guess you're mentioning there about internships and getting some of that core work experience, which we always hear is so important. Did having the support of someone like SEO London help you to obtain internships and experiences thereafter?


Anjli  11:14  
Yeah. So when I was in first year of university, I did internships at Morgan Stanley. And I did an insight day at Barclays Capital, that one was just like literally applying through the website, and then doing all that psychometric testing or just going for various phone interviews and interviews in person. And the long way around, if you like, where SEO made a difference was probably when it came to my big summer internship after the second year of university. So I had been looking for an investment banking internship. And I applied to various different banks. And I also applied to SEO at the same time. And then as it turned out, I got an internship at Citigroup in their Mergers and Acquisitions department. And at the same time, I got the SEO London offer, so they were able to kind of marry the two because they were actually partnering together. And that provided me with the mentor and all the other various training resources,


Sophie  12:14  
Some really good tools to help you on your way.


Anjli  12:17  
Yeah, absolutely. And I think when you think about things like work experience and internships, I know how difficult it is to actually get one, especially when you, say, don't have connections. But I think what I would say is don't give up, keep applying, and also doing something. So you had a particular area in mind that this is what you wanted to get internship or work experience in, be open-minded about some of the other things that are available out there. Because the point is not so much about saying I've got experience in exactly this, but more about the skill set that you're going to develop while you're there and then skills that you can transfer into another role. 


Sophie  12:58  
Amazing. I think that transferable piece is so important as we go forward.


Anjli  13:02  

Technical Round

Amy  13:06  
In our Technical Round, it would be great if you could help us out with some equity investor lingo and terminology. So what is meant by small cap, mid cap and large cap?


Anjli  13:17  
Right, okay. Well, first of all, let's take a step back, because I'll give you two definitions, because that will make understanding what each of those things means a bit easier. So first of all, market capitalization. So this is the value of a company. And it's calculated by the number of shares, multiplied by the share price. So that's definition one, right? Definition two is an index. And an index is basically a hypothetical portfolio of stocks representing a particular market or segment of the market. So you can have like a hypothetical basket of inverted commas, small cap stocks. So okay, what do we mean by small, mid and large cap? Now, the unfortunate or honest answer is that there is no standard definition, or any kind of standard size limit. Each index will classify things slightly differently in terms of where they see the cut-off points or the size of the company to make it either a small cap, mid cap or a large cap. And also, the market caps vary really significantly by geography. So I'll give you an example: a company in, say, Indonesia, it might be very, very large by Indonesian standards, but compared to say a US company, it looks very, very small. So in a global context, its definition of whether it's a small, mid or large cap can actually be very, very different. 


Amy  15:02  
Great, thanks for that.


Gillian  15:04  
Really curious to know the difference between investment banking and investment management because I think quite often they're seen as the same thing.


Anjli  15:11  
Yeah, so I've worked on both sides of the fences as well. So hopefully, I can explain this one. So investment banking is also known as the sell side. And essentially, they are involved in the issuance, sale and trading of various financial instruments. So whether it's shares in a company or bonds in a company, or you know, other alternative investments, and basically they work to create and service products that are available to the buy side, which is investment management, but the type of services or products they offer are things like investment banking. So this is like Mergers and Acquisitions, where you're acting as a strategic advisor to corporates, sales and trading, as well as research function. So, you know, providing commentary or writing reports on whether you think, for example, that company shares are worth buying or not, and the reasons why. And then on the other side of the fence, we have investment management, and that is known as buy side. And essentially what they do is they get money from investors. And the investors can be private individuals such as yourself, or they can be pension funds or other institutions, and you basically invest their money on their behalf. But the idea is that you have a skill set when it comes to investing. So therefore, you can help your clients grow the sum of money, so hopefully give them a good healthy return. So hopefully, that makes sense.


Sophie  16:57  
I wish that you were around when I was 17 and joining the industry, that would have been so helpful. I definitely had to wait a longer time until it was explained to me. I guess that following on the theme of your great wisdom, could you tell us what a fund is and more specifically what a mutual fund is?


Anjli  17:17  
Okay, so a fund pulls together money from lots of different investors and a fund manager invests on their behalf. So, each fund has like an investment objective, so things like what asset class am I going to invest in? So am I going to be buying publicly listed shares of a company? Am I looking at bonds or am I looking at some other kind of asset class. In terms of mutual funds, that is operated by professional money managers such as myself, and we basically allocate the funds assets and try to produce capital gains. And capital gains is just a fancy way of saying growing your pot of money basically. And trying to generate either, you know, increasing the pot of your money or giving you income from your pot of money. So kind of like a dividend or regular payment, kind of like, I wouldn't call it pocket money, because not quite that but similar kind of concept for the funds of investors. And basically, each shareholder in the fund participates proportionally to the funds gains or losses. So obviously, the higher your stake in the fund is and say the bigger the gain is in the fund, you will get a proportional benefit from that.


Amy  18:44  
I was wondering if you'd be able to tell me what generating alpha means?


Anjli  18:50  
So generating alpha is tied to the concept of passive versus active investing. So I'll just explain what I mean by each of those. So passive is basically when you buy an index fund. So a fund that is basically following a major global index. So for example, say the FTSE 100, which is the index that is representing the largest 100 companies in the UK. And so whenever those indices change the companies that make up that index, these funds automatically then have to buy or sell the stocks in the sense of any new company, which is entering the index, they have to buy those shares. And any company which is leaving the index, they have to sell those shares. And this kind of approach is similar to kind of buy and hold strategy. So it's where you buy and you just continue to hold the fund or hold the basket of stocks that make up the index. And basically it's tracking what's happening in the market, it's tracking that index. So if the FTSE 100 is going up by 5%, in theory, your fund should also be going up by roughly a similar amount. So then we turn to the other side of the fence, which is active investing, this is definitely more hands on. And it requires a portfolio manager or a fund manager. Basically, the goal for a fund manager such as myself is that we have to beat the stock market, and we have to generate returns which are higher than what the market is offering. So that is what we mean by alpha, it's the value that you're creating above a market return. And it requires much deeper analysis and expertise, because it's not as simple as saying, okay, there's, say 100 stocks in this index, I'm going to go buy every single one of these stocks, you're more likely taking a decision like: "Right I'm going to buy a small subset of stocks, and then I'm going to determine what we have in each single one." But it's from my knowledge of those companies, I'm going to invest my money in the companies, which I think are going to perform the most strongly. And that in theory should help you beat the index.

Gillian  21:12  
And what's the difference between public equity and private equity?


Anjli  21:16  
So public equity is basically shares of a company that are listed on the stock market - on a public exchange - where anyone can buy and sell those stocks. And private equity is quite different. So this is when shares are not listed on the public stock exchange, but rather, the shares of the company are held in the hands of private investors. So you do have professional companies who do this, who basically they buy up all the shares of a company, and then they look to improve the company from within. And once they feel they've got a suitable return over whatever their time horizon is for the investment, they then look to exit that investment, or monetize the initial investment. And they can do that in a number of ways. So they can either then sell on to an industrial company, they could sell on to another financial investor, or they could try and float the company, which basically means taking the company from being private to being public. So putting it back onto the stock market.


Current Role

Amy  22:28  
This next section is called Current Role, we're going to try and get a better understanding as what you do on a day to day basis and how you got to where you are now. So what was your route from the age of 16 to where you are now career wise?


Anjli  22:41  
Okay, so age of 16? Gosh, I feel really old. Like, oh, my god, that was 16 years ago. So what was I doing at that age? So I just finished my GCSEs down south. So I'm English, as you can probably tell, I'm sorry, I just finished my GCSEs. I was then going on to do my A-Levels. So in terms of kind of subjects, because there's always this great debate about what subjects should you be doing, etc. And I kind of just went with subjects that I enjoyed, but also perhaps varied enough to give me multiple career options. So in case one didn't work out, I had something else to fall back on. But I basically did maths, economics, physics, and biology. And my logic was that: "Oh, how is that helping me get into university to do an economics degree." Or I can go on to become like an optometrist or something. So I don't know. Very, very different things. And then from there, I went on to university. So I went to the University of Warwick and I did a degree in Economics, definitely challenging versus A-Levels like a lot of kind of self-study. And yeah, some of the concepts were just mind-blowing. But, you know, it was honestly one of the best times of my life. And then after that, I started working. And then as I've been working over the last 10 years or so I've done professional qualifications along the way. I've done things like the IMC and the CFA.


Amy  24:18  
Perfect. So with those qualifications you've just told us about, are they standard in the line of work that you're in?


Anjli  24:23  
So I would say that they're increasingly becoming more standard. Let me back up for a second. So I think certainly going through the whole kind of GCSE, A-Level, university route growing up that was quite standard in order to get to this kind of career. But I'm pleased to say that things are definitely opening up. More people are looking at different qualifications or even recruiting at more entry-level, so you know, once you finish school, etc. And I'm really pleased to see that because just having a degree doesn't make you good at your job or it doesn't mean that you're going to be a good investor. So that's really encouraging. In terms of the professional qualifications, so the IMC and CFA. So when you want to work in investments, and you're handling client money, and you're making investment decisions, there's various regulatory requirements that you need to fulfil in order to do that. And so it's quite common that when you start off in the career as part of your training, your employer is likely to ask you to do the IMC, which is the Investment Management Certificate. And then the CFA is an interesting one. So I think it's definitely not a requirement to do it but a lot of people do do it. And I think they do it because it gives them a kind of basic understanding of how financial markets work, how different asset classes work, and also different valuation techniques. So a lot of people do put themselves through it. And because the pass rate is really low, so I think it's like 30, or 40%, and it's pretty gruelling, I think some people see as a badge of honour that they've managed to make it through because I tell you, it was like the most excruciating period of my life trying to work and do the professional qualification at the same time. I basically didn't have a life for a while. But I'm happy to say it was all worth it in the end. But yeah, so that's kind of how I think about it. But to be honest, I genuinely think what's been most valuable for me is sitting alongside really good colleagues, and learning on the job. And it is a job, like, I hate to say this, but it is a job where experience really helps. So it's like when the market's crashing, and I'm panicking: "Oh, my God, what's going on?" All my stocks are in the red! And it's all going wrong! You know, my boss who's kind of worked there for like, 35/40 years just comes in and says: "I've seen that seven times before, it'll be fine." You know, just really helps to calm me down.


Amy  27:01  
That's awesome that you passed that, but would you say it's necessary to go to university to become a smaller company's equity investment director?


Anjli  27:10  
Yeah, I would say it's necessary. So it just so happens on my team, all of us have gone to university. But I wouldn't say it's an absolute necessity or a guarantee of success. And I think actually, having a different perspective in life, or a different way of how your mind processes or views things is not actually a bad thing, particularly when it comes to investment because there is no such thing as a right or wrong approach. And as a result, when you're looking at a company, perhaps you're able to better relate to certain stocks, or you're able to see a different angle on it. So definitely not a necessity. And as I mentioned earlier, a lot of companies are trying to widen their recruitment practices. So looking at non-target universities, but also looking at non-university backgrounds. So looking at school leavers, for example.


Sophie  28:08  
I think that over the last few years, I've definitely seen that in the early careers recruitment space. So not only are we, as you're saying, kind of widening at the universities, but it's really great to have some examples internally of people that have come in either on training and apprenticeship programmes and are now working in the front office in investment roles. And watching people that progress their career internally rather than through professional qualifications rather than, say, doing their qualification then coming into work. I think it's really good that we're starting to see more of a blend, but definitely people on both sides at the moment.


Anjli  28:42  
Yeah, and I think it makes a workplace much more interesting as well. Like if we're all the exact same and have the exact same backgrounds, it all becomes quite monotonous and robotic so actually having diversity whether it's in gender, race, disability, or like socioeconomic status, uni, non-uni, whatever, everything actually makes it such a more vibrant and fun place to be.


Amy  29:08  
Perfect and what made you decide to make the move from investment banking into investment management and how did you find the move between the two?


Anjli  29:16  
Yeah, so you know, I'll get crucified for this because it's like everyone hates bankers. I actually loved being on the sell side. I loved stock broking. It gave me a buzz, it was adrenaline, you'd meet loads of interesting companies and people so actually I was really enjoying it. But the one thing that I noticed, I used to be an equity research analyst. And, you know, I'd kind of do all this analysis, publish these research reports, hoping that no one would throw them in the bin straight away, but actually read all the work that I took time to produce. But it's exactly that you're sort of at the mercy of your clients, in terms of whether they want to then read that research and engage with you. And you can certainly provide your opinion or your view about whether you think this stock is interesting to buy, for example, but it's never you that makes the final decision, it will be the client that makes that decision. So what attracted me to the buy side is in essence that you have more skin in the game, because you're really forced to put your money where your mouth is. So if you're saying that: "Hey, I think this company share is really attractive and they're worth buying." You're then saying: "Okay, well, I'm going to put the client's money to work, and I'm going to buy the share." So you take more responsibility of your stock recommendations.


Gillian  30:43  
Join us for Part Two, where Anjli talks us through her average day, describes the process of investing in a stock, and lets us know which skills you need to be a good equity investor. And if we happen to have bamboozled you with any of our chat,

head over to the Breaking Through Careers website where I've got an investment management glossary.


Sophie  31:09  
Thanks for listening! Please join us again next episode as we hear some more truths, learn some more jargon and bust some more myths.


Gillian  31:17  
Don't forget to subscribe to the core breaking through careers podcast by your podcast app of choice and check out the website at

Catch you next episode!