Part 1


"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.


Lorna  0:00  
As a child, I wanted to be everything. I wanted to be an air hostess so I could travel the world. I wanted to be a vet until I went on work experience and fainted on my first day! I think it's not often that you get to have a really fun job, a really great job that can have a positive impact on the world as well. Be bold, so do things that make you afraid and take opportunities that come your way.

Gillian  0:32  
Hi I'm Gillian. 


Sophie  0:33  
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  0:42  
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  0:49  
We'll also be joined by a keen school student in each episode to help ask the questions you want to know the answers to. 


Gillian  0:55  
Do you need to study economics at a certain university to get into....


Sophie  0:58  
What's the difference between active and passive.....


Gillian  1:01  
Quam funds? Indices? Can you please speak normal English!


Sophie  1:04  
I thought you need to be posh to work in investment management, no? 


Gillian  1:06  
On a scale of 1-10, how boring would you say....


Sophie  1:08  
Am I going to need to get a pinstripe suit?


Gillian  1:12  
Hey, Sophie, I am so excited to be going on this journey with you and future asset!


Sophie  1:16  
Me too. There is so much I wish I knew when I was joining the industry, and we're going to cover it all in the next few


Gillian  1:22  
Given it's the first episode in the series, I thought we'd start with a bit of a preamble given we both love talking.


Sophie  1:28  
Okay! To start, why should people listen to us? 


Gillian  1:32  
Well... they are actually a lot better off listening to our guests than they are listening to me, which is why I'm the one ASKING the questions not answering them. But I do work as an equity research analyst. And I was where lots of our listeners are now, four years ago when I was applying for roles in the industry. They should definitely listen to you though. You've worked in HR in the industry for a number of years, right?


Sophie  1:51  
I have indeed. I originally joined the industry as an operations apprentice, before moving into human resources where I have worked for the last six years. My job is all about attracting new talent to our industry and developing them through early careers programmes. That's things like apprenticeships, internships and graduate programmes. It's not the first job people think of when we talk about the investment management industry. But it's one of many different types of roles we have here, and one that I think is very important.


Gillian  2:16  
So our plan for the podcast series is to demystify the investment management industry using plain English and in Series One, we tackle public equities. Just a quick note, the episodes will get a little more technical as we go along. But don't worry, we've got an investment management glossary to accompany each episode that you can find via the Breaking Through Careers website.


Sophie  2:35  
Okay, that's enough chitchat from us time to get started so people can hear from the people they actually tuned in to listen to!


Gillian  2:41  
Haha let's go! Today, we're going to welcome Lorna, an investment analyst in the sustainable funds group at Stewart Investors.


Erin  2:51  
In this episode, Lorna is going to tell us what a job in sustainable investing looks like, how you can change the world for the better through a job in investing, and how it's possible to move from a career in management consulting to a career in investment management.


Gillian  3:08  
So today, we're asking what is sustainable 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  3:17  
Hey Gillian! 


Gillian  3:17  
And this week, our guest co-host is Erin, from Bishopbriggs Academy. Welcome, Erin!


Erin  3:22  
Hey, guys, how are you?


Sophie  3:24  
I'm doing good thanks. How are you both?


Erin  3:26  
Good, thanks for asking.


Gillian  3:27  
So what do both of you know about sustainable investing?


Sophie  3:30  
I'm going to think of sustainable investing as the way that you think about sustainable fashion. So thinking about the resources that you get, and if they're good for the planet, and thinking about, how you treat people that are in that supply chain. So I reckon it must be a bit about people and planet.


Erin  3:47  
Honestly, I don't really know a lot about sustainable investing. But I would like to get to know how it works, because I'm interested in business and how it links into different roles, and that part of the industry. 


Gillian  3:57  
Fantastic. So what in particular, are you looking forward to learning about today?


Sophie  4:02  
I'm quite looking forward to learning more of the jargon because I hear a lot about impact investing, about sustainable, about ESG..... And I am quite excited to work out what the difference is between these things and what they all mean.


Erin  4:15  
I'm looking forward to seeing what investment can do for people my age, and their future. And how they can learn about it and how this big, scary word of investing and investment - that not a lot of people know about - how we can just make it easier for people to understand.


Gillian  4:32  
Absolutely. I think demystifying the industry and helping with jargons can be great, like ESG, CPU, all of these acronyms. I think it's great for us to just go back to basics. So I think it's going to be time for Lorna to come help us with all of this. So let's welcome Lorna. Hi, Lorna, how are you?


Lorna  4:52  
Hi, Gillian, I'm well thank you. How are you?


Gillian  4:54  
Great thanks! Thank you so much for coming on our podcast.


Lorna  4:57  
Thank you for having me. I'm very excited to be here.

Quick Fire Round

Gillian  5:00  
We are too! So we will jump straight into our first section, which is called the Quickfire Round. We're going to ask you a bunch of really random questions and you've got to answer as quickly as possible with the first answer that comes in your mind. Are you ready?


Lorna  5:16  
Okay, go for it. 


Gillian  5:17  
Great. Favourite meal?


Lorna  5:19  
Oh gosh.... Indian food?


Erin  5:24  
Would you rather be too hot or too cold? 


Lorna  5:27  
Oh definitely too hot. 


Sophie  5:28  
Do you prefer swimming or running?


Lorna  5:30  


Gillian  5:31  
Me too! Sorry, this is not about me, but we've got a lot in common so far. Anyways, did you go to a government school or a private school?


Lorna  5:41  
Government school. 


Erin  5:42  
Favourite board game?


Lorna  5:44  


Sophie  5:45  
What's one place in the world that you would really like to visit, Lorna?


Lorna  5:49  
Oh, lots of places! I'm going to say.... Indonesia.


Gillian  5:53  
And finally, favourite word? 


Lorna  5:55  
Favourite word? Oh my goodness. So many words to choose from! Um... fantastico! 


Gillian  6:04  
This is great!


Lorna  6:07  
I'm not good under pressure. I'm sorry, I have no idea where any of those answers came from. I'm sure not any of them

were accurate.


Sophie  6:13  
I'm very excited for a fantastico interview.


Gillian  6:18  
It's great!


Sophie  6:22  
Fab, well the next section, you've got a bit more time to think for this one. It's all about you. We want to get to know a little bit more about who you are and how you got to where you are today. So I'm going to start with asking you where you're from? And what city do you live in now?


Lorna  6:36  
Okay, I'm from Troon, which is, everybody probably knows, but it's the smallest town in southwest of Glasgow. And I live in Edinburgh, but I have lived in Glasgow for four years. I've lived in New Zealand for three years. And I've lived in Australia for eight years. So I've been around a bit, but I'm now in Edinburgh. 


Sophie  6:54  
Here, there and everywhere. And now you're back to the best say? I think I'm a bit biased.


Lorna  7:04  
As you should be!


Gillian  7:05  
So why did you agree to come on to our podcast?


Lorna  7:08  
Because I want to encourage more awesome ladies to join the industry like Erin and maybe some of her friends too!


Erin  7:15  
What is your job? And what kind of investment firm do you work for? 


Lorna  7:19  
Okay, so my job is an investment analyst. And I work for the sustainable funds group at Stewart Investors. So we are very long term investors that are trying to invest in companies that are good sustainability companies. So my job is basically to try and find good companies to invest in that are both well placed to benefit and contribute to sustainability.


Sophie  7:41  
And if you think back to your young days in Troon, did you always know that you wanted to grow up to be an investment



Lorna  7:48  
Oh no! I had no idea what an investment analyst was, I had no idea about the industry at all. As a child, I wanted to be everything. I wanted to be an air hostess, so I could travel the world. I wanted to be a vet until I went on work experience and fainted on my first day! I wanted to be so many different things. And then eventually, I decided I wanted to be a businesswoman. I wanted to be a high powered businesswoman, that sounds really cool. I must have watched some movies where there was some high power position in it. That looks good, working with people - so I had no idea!


Sophie  8:24  
And I guess your family would have seen you kind of choosing lots of different professions that you thought you wanted to go down. Did you feel that there was pressure to know early on what you want it to do? 


Lorna  8:34  
A little bit. It's funny, I remember at high school, we were all given this test where you had to fill out a form and answer yes or no to various things. And then you were told what career would be perfect for you. I vividly remember my number one answer was to be a fish farmer.


Sophie  8:53  
Did they just see that you were from Troon and they were like "close enough"!


Lorna  8:56  
How did that come out? I mean, come on. I did not write anything about fish on that form!


Sophie  9:02  
Postcode near the sea, good enough!


Lorna  9:07  
So I failed and that's why I have not become a fish farmer sadly. But yeah, I think there's always that sort of pressure that you need to know what you're going to do. But I mean, gosh, my biggest advice is not to worry about any of that. Because what I thought I wanted to do changed so many times over the years, and now I've found finally what I want to do. But that's taken me 15 years to figure out, since school. So no, I didn't know what I wanted to do.


Gillian  9:31  
And actually going back to those days, what kind of kid were you when you were younger? 


Lorna  9:35  
I was a very sporty kid. I was doing a bit of running, I was doing some tennis, I was quite a tomboy and some of my friends were quite tomboyish, too. I lived quite close to a forest and so we were always in the forests, climbing trees and damming rivers and all sorts of things just getting muddy. So yeah, it was quite a fun childhood. Troon is great. It's got the beach, it's got forest, it's got all sorts of outdoorsy things. So it's a nice place. 


Gillian  9:59  
Fish farming... 


Lorna  10:01  
Lots of fish farming, fish everywhere.....


Erin  10:05  
Apart from your fish farming skills, what do you think are your unique skills that have helped you to become successful?


Lorna  10:12  
Oh, golly, unique. I'm not sure there's much that's unique. I think maybe my tenaciousness, my determination, I think. Because my mom was such an integral part of my character building experience, basically, from a very early age. Her one mantra for me was: you can, you will, and you're going to. There's no such thing as can't. And so I was a very shy child, I was scared to say boo to a goose. I would never pick up the phone to talk to anybody, I was so shy. And so I think she maybe tried to overcompensate, and always tell me that you can do stuff and really helped to encourage me to be more confident. Maybe that's helped me to see if things are not going so well, then you just keep trying, because there is no such thing as can't. To just keep going.


Sophie  10:57  
It's such a good mantra.


Lorna  10:59  
It is isn't it? I've got two kids, and I'm definitely going to do the same with them like "you can, you will, you're going to!" 


Sophie  11:04  
And anyone listening to this! 


Lorna  11:07  
Exactly. It's such a good thing.


Sophie  11:08  
And I guess, you know, looking at lots of different careers before deciding that you're going to be a big, successful businesswoman, and work in investments. What were the key resources that helped you on your journey to finding that that's what you wanted to do?


Lorna  11:21  
I think it was a bit of trial and error, my career has been very varied. So I went to university, I did a general business degree, I then worked in management consulting, which is very different again. And then I worked in finance and banking a little bit and then moved into investment management, after doing a Master's in sustainability. So I think in order to get into investment management, you kind of have to have a bit of a an angle, a bit of an edge, something that's different. Because the part of the business that I moved into was a sustainability business. I guess the fact that I had done that Master's in sustainability helped me to get into that business at that time. I think it was lucky timing for me, but I didn't plan it like that. So it could easily not have worked out it just so happened that things worked out in a good time, where I was studying an area that I was really passionate about and really cared about and then managed to thankfully move into a business that was doing a similar thing.


Sophie  12:15  
Amazing. So a lot of different hats before you landed on where you want to be. Why did you go for a sustainability Master's?


Lorna  12:23  
Yeah, I've always just been a bit of a greeny I suppose. So just really care about the environment and you know, treating the environment with respect. Worried about climate change, worried about pollution, worried about social impacts, and how companies have a real impact on the world. So before finding sustainable investing as a thing, I was trying to find other angles as well. So when I was working in management consulting, I was trying to move into sustainability consulting. But that was a very difficult thing to do at the time, you had to have experience, you had to study, you had to have done all of these things. And so I found myself working in finance. Then I could see that there was this growing area within finance to try to do more on sustainable investing. So I could see that was where I wanted to go and so I thought: "Well, I don't really have the experience, the work experience, and maybe study is something that would help me get to that point." So did a part time Master's, I was still working full time, and doing a part time Master's on the side. To be able to sort of pivot into that part of the business, which thankfully helped me get my role in sustainable investing.


Sophie  13:25  
Fantastic. I mean, it sounds like it definitely paid off and got you to where you want to be. 


Lorna  13:30  
I think it definitely helped, yeah, I think it definitely helped.


Gillian  13:36  
Fantastic, thanks. So we'll move on to our next section and that's the Technical Round. 


Erin  13:40  
In our Technical Round, Lorna, it would be great if you could help us out with some of our lingo and terminology. So what

is meant by ESG? And what is meant by sustainable investing? 


Lorna  13:53  
Yeah, it's a good question. ESG is an acronym that stands for environmental, social, and governance. And it's an acronym that is used very heavily within the finance industry, and even more so today. 10 years ago, sustainable investing and ESG investing was really sort of starting up and it wasn't very popular. Our group has been doing sustainable investing since 2005, and at that time, people really had to argue the case that thinking about environmental issues, thinking about social issues were not a trade off to performance. That it is actually something that can drive performance. But at that time, it really wasn't a thing that was believed. Publicly, in society, people just thought: "Well, if you're investing in sustainability companies, then you're probably going to have to give up some financial returns." Thankfully, the industry has completely moved on now. And so now ESG investing or basically taking environmental, social and governance factors into account when you're choosing what companies you're going to be investing in, is now common practice. And most managers do that. Sustainable investing is a similar sort of thing. It means different things to different people depending on how they define it. So some people define sustainable investing, as just cutting out certain stocks. So getting rid of tobacco stocks and fossil fuel companies, getting rid of alcohol companies, gambling companies, that sort of thing. Other people might define that as investing only in green technologies or green energy companies. At Stewart Investors, we take a broad view to what sustainable investing means. So we're simply looking for companies that are well placed to benefit from and contribute to sustainable development. So that might mean investing in a health care company that's helping to reduce healthcare costs. It might mean investing in a bank in a developing country that's helping to provide mortgages to lower income individuals. So it's really just investing in good quality companies that are helping to make the world a more sustainable place for us and for future generations. 


Sophie  15:44  
Fantastic. Could you tell us, Lorna, what a portfolio is?


Lorna  15:49  
Sure yes. So a portfolio is essentially a collection of investments that are grouped together into a fund. So it's another name for a fund. So for example, the fund that I work on is a worldwide sustainability portfolio. So we have 50 or so companies that we invest in, and together those companies comprise our portfolio. So it's just really another word for an investment fund or a group of companies that you're investing in.


Gillian  16:13  
Great. Well, continuing in the same vein, what is an index? And what's a benchmark? And can you give us some examples, please?


Lorna  16:19  
Sure, it is a good question. Okay, so an index is a list of companies that are grouped together, and you might recognise some of the names that you might have seen on the news or on finance newspapers and things. But things like the FTSE 100, the S&P 500, the Nasdaq, and the Dow Jones Sustainability Index. These are all indices or indexes. So for example, the FTSE 100 is the biggest 100 companies in the UK, the Dow Jones Sustainability Index is a group of companies that all have sustainability scores that are above average. The S&P 500 is the 500 biggest companies in the US. So it's basically just a way of benchmarking company performance against your individual fund. So my fund that I work on, we're trying to make sure that we beat that index or that benchmark. So however these companies on average have performed, we want to do better than that. So that's where the word benchmark comes from, your benchmarking funds against general indices of companies that are out there. 


Erin  17:18  
Could you explain to us what the difference between growth investing and value investing is?


Lorna  17:24  
Yes and it's such a hot topic at the moment, with markets in general just flying and growth investing being very, very popular and performing well over the last number of years. So growth investing is when you choose to invest in a company that you think will grow quickly over the next few years. So it might be a company that's got really great technology, or in a growing industry and growing very fast. An example might be, of recent years, Facebook or Amazon have been growth stocks, typical growth stocks. They tend to be quite expensive as well. And so you're basically paying up for something that you think will continue to grow quickly. Value stocks, on the other hand, are companies that you think are cheap or undervalued today versus what you think they should be worth. And so you'd be basically investing in them because you think the share price will go up. So two slightly different investment approaches there.


Erin  18:17  
And what is meant by the buy side and the sell side?


Lorna  18:23  
You know, I worked in the industry for quite a while and it took me a long time to figure it out! So essentially, the investment industry is comprised of two sides, the buy side and the sell side. The buy side is what I'm on. So that includes fund managers, pension funds, hedge funds, and these are the groups that are buying the stocks. So we buy and sell shares, and we put them in our funds, so we're buying the stocks, the companies. On the sell side, the sell side includes investment banks, and they're the ones who actually facilitate the selling of the shares through exchanges. So examples of companies on the sell side would be Citibank or Goldman Sachs. And they also produce research as well. So people on the buy side, like me, purchase research from the sell side, which is their analysis of how companies are doing. It's a funny industry where you've got the buy side and the sell side, but essentially, fund managers sit on the buy side and investment banks sit on the sell side.

Current Role

Erin  19:21  
This next section is called Current Role, where we will try to get better understanding of what you do on a day to day basis and how you got where you are now. What was your route from age 16 to where you are now career wise? 


Lorna  19:36  
Okay, so I went to Marr College in Troon, the local state school. I then went to Strathclyde University and I did a BA in Business and Psychology, with a bit of a focus on HR because at the time I thought I was a people person. So I thought I wanted to go into HR. This was one of my many steps in my career where I wanted to do 100 different things. So I thought a general degree would be quite good because it would open me up to lots of different opportunities. So I got my 2:1 degree from Strathclyde, as part of that degree, I did an exchange to New Zealand. So I did six months at the University of Otago, which was a fantastic opportunity. I would definitely recommend to anybody if they get the opportunity, as part of any course, to do something abroad, to take it because it's such a great experience. I then went into the workplace and so actually started off working for Rolls Royce originally, and that was my first job out of university. I did their graduate programme, but I was only there for a few months before getting an opportunity to join the Capgemini graduate programme. And so I worked there for four years doing management consulting, which was great. Then from there, I moved to Australia. So that was the Australia link, they were recruiting in their Sydney office. And so I moved there. Then I left management consulting, to move into the investment industry. Then in the investment industry, I completed my investment management certificate, and then I chose to do the Master's. So I did a Master's in Sustainability Leadership. And that's all the certificates I think. That's it, I'm afraid! I might do some more at some stage, but probably not anytime soon.


Erin  21:16  
And those qualifications and certificates that you gained, would you say that is the standard? 


Lorna  21:21  
To get into investment management? No. So I think historically, to get into investment management, it's always been a very "everyone did the same thing." So you go to university, you do finance, you do accounting or whatever, and then you move into investment management. I think the industry has changed quite a lot over the last few years, where I think they've realised that having the same people, from the same universities, from the same backgrounds has actually created an industry that's not diverse in any way, shape, or form. And so you lose that diversity of opinion, diversity of thought, and all of the benefits that you get from diversity. So a lot of the investment management companies, that I know anyway, are actively trying to move away from that stereotype of the finance grads from Cambridge and Oxford. And the investment management grads from certain universities, and certain backgrounds, to being much more open to different backgrounds. So I think my background into the industry is really different to the normal ones. I mean, I'm also not joining the industry early in my career, I've been working for a while and sort of joined a little bit towards the middle of my career and coming in from a more business and sustainability background, which is totally different from the traditional route of the past and from the other graduates or other new people coming into the industry. I see more and more different backgrounds, different university degrees, politics, philosophy, all sorts of courses and backgrounds and experiences, which I think benefits the industry as a whole and hopefully will continue, which I'm sure it will.


Gillian  23:00  
Join us for Part Two, where we find out what Lorna's not so average day looks like, where we hear whether investments is as cutthroat as it seems on the TV, and where we get more detail on what ESG or sustainable stocks actually look like.


Sophie  23:13  
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  23:21  
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  23:29  
Catch you next episode!