Peter is Co-Head of SA & Africa Fixed Income and is a portfolio manager for a range of fixed income portfolios, including the Investec Diversified Income and the Investec Gilt Funds. Prior to joining Investec Asset Management, he spent eight years as an interest rate derivative trader at Goldman Sachs in London. Peter holds a Bachelor of Commerce (Hons) from the University of Cape Town, and a Master of Science degree in Finance from the London Business School. He is also a Chartered Accountant (SA) and a CFA Charterholder.
You returned to South Africa after several years abroad, working for some of the world’s largest financial institutions. Firstly, why did you return, and secondly, given the political turmoil over recent years, did you ever question your decision to return?
There were both push and pull factors behind our decision to return to South Africa. The factors pushing me from London were largely industry- and job-related. The City of London was changing and I wasn’t enjoying the work environment as much anymore. I’d been at Goldman Sachs throughout the financial crisis, and whilst I learnt a lot and it was exhilarating over this time, it was also incredibly stressful on me and my family. What started as a need for a job change, ultimately resulted in a homecoming.
Initially we seriously considered Australia, as my wife’s family lives there; I also looked at joining a hedge fund in London. And despite a really good job offer from Goldman Sachs in Sydney, I just couldn’t resist the pull of home.
While Australia probably looked like a safer bet on paper, I wanted to be part of the solution in South Africa. I felt like I was part of the problem staying in London. I also have young kids and my wish for them was to grow up South African. Ultimately, that was the deciding factor – I wanted them to have South African heroes and South African memories.
My big fear in coming back to Cape Town was that I would come back and gather dust here after years at the cutting edge of global banking. I needed a globally relevant role and Investec Asset Management could offer me just that. It has been a real positive to remain so globally connected.
We arrived home early in 2012, when the mood was still pretty positive. However, I clearly remember the harrowing moment I heard about the Marikana massacre in August 2012. It was a clear signal to me that our young democracy was about to embark on a really tough path.
Have I regretted the decision to return? No. Admittedly, I have been scared for my family’s and the country’s future, but our reasons for coming back haven’t changed. I’m relieved that December heralded positive political change and I’m as motivated as ever to help make the next 20 years in South Africa count.
What does your international experience bring to the way you manage money here?
As a South African bond manager, our market oscillates between being driven by local and global factors. Clearly, the political changes locally have dominated our market over the last six months. However, I would venture to say that two-thirds of what I do is analysis of global factors, and given their importance for global markets, specifically the Federal Reserve and the European Central Bank. I think having grown up analysing those central banks and the experience I gained in my years abroad have given our team a competitive advantage. My knowledge and experience of the external environment complements Malcolm Charles and Nazmeera Moola’s deep understanding of the local dynamics really well.
Some say bonds are boring. Did you choose fixed income, or did it choose you?
Bonds per se are too narrow, so I consider myself as a global macro person. I trained as an accountant and during my articles at Deloitte, I covered a lot of unit trusts. I gravitated towards fixed income and currency unit trusts at that early stage, which is telling that I have always had an interest in global macro over stock picking. Funnily enough, my first ever unit trust investment was in the Investec Gilt Fund when I was saving for my wife’s engagement ring. Who would have thought I would come full circle and now also manage that fund!
You and your colleagues in the fixed income team are a very close-knit group, seemingly with a lot of respect for one another. What makes your team special?
One of the things I loved about the UK is that it is a society that has the ability to constructively debate really tough issues (except for Brexit!). In our team I actively promote an ethos where ideas are currency. There is no hierarchy and everyone has a voice; we encourage debate and consider and celebrate everyone’s view. I honestly believe it is that diversity of views that keeps us on our toes and makes us better at our jobs as investment managers.
Clearly, there have been some pretty tough periods over the last six years, but I’m a big believer in using humour to brighten things up. We work hard in our team, but we like to keep things light-hearted too.
What are some of the lessons you’ve learnt over the years?
I think if you consider a career in investment you have to be deeply self-analytical and develop a true understanding of where you have skill and edge and where you don’t. It takes years of contemplation and brutal honesty with yourself to get to that point. This is a tough business and you can still question whether you’re up to the job 20 years in.
One of my biggest learnings as an investment manager is that you can’t have a fear of being wrong. You will be wrong a lot of the time and you have to come to terms with that, but what is not acceptable is if you’re wrong due to a lack of preparation. I see far too many people who fear being wrong and as a result are scared to voice an opinion or take risk.
I also believe the greatest attribute you can have as an investment professional is curiosity. You need to question all the time. It is a catalyst for deeper analysis and ultimately reveals the problems with widely held assumptions – and that is where alpha is generated.
Tell us something people wouldn’t know about you?
Art was one of my major subjects at school and I almost chose to study architecture over finance. I do, however, find that the artistic inclination has found purchase in analysing markets over the years as it requires a lot of creativity and visualisation. One day I hope to set up an architectural tour of Cape Town’s beautiful buildings – do yourself a favour and take a walk around Cape Town and look at the buildings for once, not the mountain.
I also could have easily pursued an academic career. I have entertained notions of giving it all up to study history or anthropology and spend my life researching, reading and learning. I have this thirst for knowledge, which is why I love my job so much – there is so much to learn and it is imperative to understand what is driving the world. That, and the fact that I’m paid to have an opinion (something not always that welcome at home!).
What would you tell your teenage self today?
Listen to your dad! He really does know better. You only learn that with age.
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