“I can’t invest in corporate bonds without doing credit analysis. In the same way, I can’t invest in them without doing ESG analysis. It’s almost like two sides of the same coin, and you shouldn’t really detach this. ”
— Mark Dowding
Mark Dowding is Chief Investment Officer at BlueBay Asset Management. Mark is a macro fixed income specialist who meets regularly in that context with global policymakers and has been actively involved in sovereign ESG engagement. He began his career in 1993 as a fixed income portfolio manager, after earning his economics degree at the University of Warwick.
In today’s episode, Mark speaks about his early career, how he came to be the Head of Global Fixed Income at Invesco at only 28 years of age, his move to Frankfurt to work with Deutsche Asset Management and why he chose to move with his family back to the UK, where he joined BlueBay Asset Management in 2010.
We discuss his time at the University of Warwick and whether Warwick lives up to its title of the happiest place to live in Britain! Mark tells us about his love of football and his support of Chelsea F.C. and then we move onto the more serious stuff, with an overview of BlueBay and Mark’s role as Chief Investment Officer.
We hear how BlueBay incorporates ESG criteria into all of their investment decisions, and how they have incorporated ESG analysis into their investment teams rather than structuring it as a separate research function. Mark shares real life examples of their engagement activities with sovereign issuers, how they have shorted bonds of issuers who they perceive as performing poorly from an ESG perspective and how their investing strategies in sovereign bonds have impacted government policy and behavior.
No fixed income ESG discussion would be complete without talking about greenwashing, and we discuss to what extent this practice exists at the sovereign level. We speak about BlueBay’s Impact Aligned Bond Fund and finally, I quiz Mark with some rapid fire questions such as the single most important challenge in the fixed income space, and his advice on how to get into the sustainable fixed income space.
I thoroughly enjoyed this insightful discussion with Mark and I hope you will too!
Listen to the episode on Apple Podcasts, Spotify, Overcast, Podcast Addict, Pocket Casts, Castbox, Google Podcasts, Amazon Music, or on your favorite podcast platform. You can watch the interview on YouTube here.
What was your favorite quote or lesson from this episode? Please let me know in the comments.
SCROLL BELOW FOR LINKS AND SHOW NOTES…
SELECTED LINKS FROM THIS EPISODE:
- Connect with Mark Dowding: LinkedIn
- BlueBay Asset Management
- BlueBay Impact Aligned Bond Fund
- Chelsea F.C.
- Deutsche Asset Management
- Invesco
- Johnson Controls
- Kingspan
- Morgan Grenfell
- RBC
- RPS Group
- Spectris
- Stantec
- Stericycle
- UN PRI
- Volkswagen Emissions Scandal
SHOW NOTES:
[00:00] Episode introduction.
[02:18] We discuss Mark’s early career and how he came to work in fixed income.
[04:08] How Mark came to be the Head of Global Fixed Income at Invesco at only 28 years of age.
[04:40] Mark tells us about his move to Frankfurt, working as Head of Fixed Income for Deutsche Asset Management for several years.
[05:04] We hear how Mark came to join BlueBay Asset Management in 2010.
[06:21] BlueBay’s acquisition by the Royal Bank of Canada.
[07:37] Mark talks about his love of football and support of Chelsea Football Club.
[08:14] We discuss Mark’s personal journey to sustainable finance.
[12:20] Mark gives us an overview of BlueBay Asset Management and his role as Chief Investment Officer.
[18:26] Mark describes how BlueBay incorporates ESG analysis into their investment decisions.
[24:31] Mark shares his views on green bonds.
[27:40] Mark shares an example of ‘ESG behaviour change’ and how, by identifying poor ESG performance,they create opportunities to educate and positively impact issuer behaviour while generating incremental positive returns in the process.
[35:47] We discuss how BlueBay engages with sovereign issuers and Mark shares an example of how, by lobbying and speaking out on certain issues as a company, they can drive positive change over time.
[42:02] Mark gives examples of engaging with corporate bond issuers, citing the example of the VW emissions scandal, and how BlueBay saw an opportunity to bring about positive change by engaging with VW.
[45:14] We discuss greenwashing and whether this exists at sovereign level.
[46:59] Mark tells us about BlueBay’s Impact Aligned Bond Fund.
[53:08] The single most important challenge in the sustainable fixed income space.
[53:58] Mark shares an example of an investment that didn’t work out as planned.
[56:48] Mark gives his advice on how to get into the sustainable fixed income space.
MORE MARK DOWDING QUOTES FROM THE INTERVIEW:
“We fully embraced ESG integration a number of years ago, so we incorporated ESG analysis as a formal part of our analysis of every investment decision. ”
— Mark Dowding
“ESG had always been around in the nineties and the early noughties, but by the time we got to the beginning of the last decade, you could see that this was not something which was a pure niche interest on the part of a small subset of your investors, it was something which was going to become much more mainstream. ”
— Mark Dowding
“We think this [passive funds investing in green bonds] is missing out on the really big opportunity in ESG and sustainable investing, which is, intrinsically, for us as stewards of capital, to really use our influence in order to drive an agenda of some change. ”
— Mark Dowding
“Sometimes you can look at analysis and you can look at data, but that data is backward looking. What really should matter is what lays in store in terms of future behaviour. You see the delta on behaviour changing. You’re seeking to reward and encourage that behaviour. ”
— Mark Dowding
