PORTFOLIO MANAGEMENT
BY: MAHA KHAN PHILLIPS • PROFILES BY: STUART NEWMAN
W
hen most people think of the fund management they are genuinely free to pick any stock they like, or
industry, they think of portfolio managers, whether they have to adhere broadly to a house
investing their money. Portfolio management is policy,” explains Kim Yates, director of the asset
the crux of the investment management industry, and one of management practise at Principal Search, the
the most sought after careers to be had. It is also one of the recruitment company.
hardest areas of fund management to build a career in. Only
the best and the brightest succeed. RESTRICTIONS
At the most basic level, a portfolio manager has Larger fund management companies tend to have
responsibility of a portfolio of assets, which he invests for his more restrictions on investing, although many
clients; following certain guidelines imposed either by the operate individual boutique-like structures within
mandate or by the company he works for. His career is the larger business. “Portfolio managers have to
made, or broken, by the performance of his portfolio, and perform within certain ranges, so there’s only so
the returns he makes for his clients. Much of the decision- much freedom they can have, and that’s the
making process depends on where the portfolio manager challenge of managing portfolios, it’s both a science
works, and what style of investing he is involved with. and an art,” explains Yates. A portfolio manager
“When a fund manager is a portfolio manger, he simply running a global equity portfolio, for example, may
manages assets. But the degree of discretion which these come up against house policy, which dictates how
guys have varies enormously from house to house, whether much money he or she can have in each sector or
stock. “It goes all the way down to the portfolio
construction level,” says Yates.
At some investment houses, portfolio managers
will be supported by internal analysts who actually
make stock recommendations or have buy lists for
DENISE PRIME, CFA
the portfolio managers to work from. Managers who
Title: Portfolio Manager
don’t like this system tend to move to investment
Current employer:
houses where analysts have less infl uence in the
Henderson Global Investors
Previous employers:
JPMorgan; Latin American
Newsletters
Are there certain skills you would consider useful for your job?
University: Bryn Mawr College
A good grasp of economics and an interest in and understanding
Degrees: Bachelors in Economics
of world affairs certainly helps. Beyond that, an ability to remain
Professional qualifi cations:
calm and objective and perform well under stress is a must.
CFA; IMC
How do you think the role you’re in now will change over time?
What attracted you to this career path? The funds we manage have moved away from traditional
Having specialised in economic development at university, I benchmarked funds towards absolute-return mandates, with a
wanted to be involved in emerging markets. We are, I believe, at greater focus on local markets rather than external debt. This
a really exciting tipping point which is seeing emerging markets approach involves looking at different instruments (such as
mature and expand and come into their own. interest-rate swaps and currencies) and an awareness of
different investor bases.
What are the major challenges you face in your position?
It can be diffi cult managing risk in these extremely volatile Do you have advice for someone intending to pursue the same
markets, which are suffering from poor liquidity and can be career path?
distorted by technical factors. My universe covers countries as Portfolio management is not all about numbers, it’s a left-and-
diverse as Argentina and Zambia, and it is a challenge to keep right side of the brain job which is challenging and, while
on top of political and economic events affecting them all. demanding, never dull.
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