ECONOMY | 2021.07.01
“Central banks and good financial advice have been investors’ best allies”
Citywire magazine has named Ismael García Puente, investment manager at MAPFRE Inversión, as one of Europe’s leading fund selectors under 40. This talented young man, who prefers to talk about teamwork rather than himself, says optimism and hard work are vital. He paraphrases Richard Grinol—professor at the University of Berkeley—and says success in his profession depends on having skills and taking advantage of opportunities. In his opinion, the excellent advice that MAPFRE offers to its clients, in whatever context, is the best driver in terms of continued growth.
He sees life as a long distance endurance race, is naturally cautious and is optimistic about the future despite how difficult this year has been. He will see out 2020 having been recognized as one of the best in his profession, and a firm believer in the values of work, discipline and patience to weather the storm.
Question (Q.): What does it mean to be named one of the best fund selectors under the age of 40, according to Citywire?
Answer (A.): It feels good, for two reasons. First, because I wasn’t expecting it: I don’t take part in any rankings, competitions or leagues at European level. People recognize your work when it is having some impact which your peers in the industry are talking about, or simply because you are well-known within the industry, so I am extremely proud to be in this ranking. What I find most rewarding is simply knowing that other professionals who I look up to are acknowledging and appreciating my efforts.
(Q.): How did you end up here? What advice would you give other young people about cultivating talent and career development?
(A.) Even before I went to university, I knew that I wanted to focus on investing. I was always drawn to it. It’s like a calling—some people have it, some people don’t. You work your way up the career ladder little by little. You train to improve your prospects, and do the best you can in your job. That’s the only way to do it, because nobody lands their dream job straight out of university. While you are doing all this work, training, getting a proper footing, building relationships, there are always moments of doubt when you start to think about a lot of things, such as whether all the effort is worthwhile. At the end of the day, you just have to be patient and make the most of your opportunities. There are actually not that many opportunities in this industry, so when the time comes you have to be ready. If I was asked to give advice, for the investment industry or for any other, for that matter, I would say that the best investment is patience, discipline, work and being curious. If you are curious (a virtue which is underestimated, in my opinion), you are interested in hearing other people’s points of view, you can develop your own criteria, and it helps you analyze or search for additional information, which is often very useful.
(Q): How do you see the future of fund management? What philosophies and tips will be trending?
A.: These are hard times for fund management, and indeed for many other industries. Passive management has taken off and this is driving down costs. Fund managers are competing for lower fees, and since margins are shrinking, they are trying to gain in volume, i.e. there is a surge in corporate mergers and acquisitions with the aim of gaining in cost efficiency. I don’t think this is the right path, however, because the investment industry has always done well through its inherent quest for excellence. I am a little concerned that this drive to achieve higher margins by lowering prices will lead to poorer quality of management. Or maybe this “natural selection,” where only the strongest survive, was inevitable, and it is only becoming visible and starting to develop now. That’s my vision of fund management. What about trends? I think the mega-trend is Socially Responsible Investment (SRI). It seems that people are only talking about it now but actually it’s been quite popular for some time now. It is going to get more and more popular, and I think that if you don’t get into SRI you will kick yourself in the future. MAPFRE has been awarded the French seal of approval recognizing two of its funds as being genuinely socially responsible. It is the first Spanish fund manager to be awarded this seal, and this shows us we are on the right path. I think the prospects for our fund manager are good.
(Q): 2020 has been a year full of challenges—the pandemic, the US elections, vaccine research and market impact, to name but a few. What makes you feel confident when you’re surrounded by so much uncertainty?
A.: Recently I said that it doesn’t make sense to expect the unimaginable: you cannot expect something which you literally cannot imagine. Yes, this is not the first pandemic the world has faced, but no other pandemic has been on such a global scale, and many people have lost their lives because of it. Of course we were relying on effective vaccines being developed, and this actually happened much earlier than we expected. In such a difficult year, investors have been sustained by the drive of the central banks. It is the central banks that have kept our hopes up, they managed to revive the markets after the nadir in March. So our best allies, whether we are a small saver or large investors, are the central banks. Although sometimes, when your portfolio is not doing so well and when you don’t know who to believe, the best thing is to talk to a good financial advisor, who is never far away. A good financial advisor knows how to explain technical market factors, how investors’ minds work, and that finances and emotions go hand in hand. A professional helps you to make decisions, teaches you about the emotional side that all investors have to develop throughout their lifetimes in order to take the right path when things look bleak. They can give investors confidence at times like this and at any other time.
“If you are curious (a virtue which is underestimated, in my opinion), you are interested in hearing other people’s points of view, you can develop your own criteria, and it helps you analyze or search for additional information, which is often very useful.”
(Q.): Turning to more personal matters, what does a professional like you do to get out of your comfort zone?
A.: I suppose I am quite odd in that I prefer to spend more time outside the comfort zone than inside it. The less I know about something, the more strongly I am drawn to it. That’s why for me curiosity is a way of life. Some time ago somebody told me that when he met someone, he focused all his efforts on listening carefully to what that person had to say and learning as much as possible about them—because whenever you meet someone new, they will know something that you don’t. This has been my motto for years. To make it out of complicated situations, we have to believe we can do it; that for me is vital. That’s why we’re trying to make a better world for future generations together, and this has a lot to do with socially responsible investment, which goes some way toward this goal.
(Q): How can we get this message about a better world really being possible across to young people, who face so much uncertainty and difficulties in accessing employment, savings, etc.?
A.: It is tough, but as I said, it is a question of belief. Naturally, young people face a much more complicated situation than they did 10 or 15 years ago. The positive side is that significant changes are afoot and there will be new ways of working and collaborating. We live in a world where on the other end of the phone or screen we have all sorts of other people to share knowledge with, and we can take advantage of social networks (used appropriately). As the poet Alexander Pope said, “Hope springs eternal.” The world is constantly changing and improving. We thought the vaccine wouldn’t arrive before the end of the year, and yet here it is… I would encourage young people to be patient and keep their dream of becoming successful professionals alive… And for them to take advantage of the opportunities that will come their way. In fact, they have the opportunity to create opportunities that we did not have until now. I urge them to remain positive, and not to give up, they must be patient, work hard, be disciplined and creative—we need people like that to create a better world.