Name: Meena Lakshmanan
Current Role: Head of Alternatives
Previous Experience: Asset Manager/Capital Markets Analyst/Fund Analyst
Academics: PhD Mathematics – University of Cambridge
Accolades: On Shortlist of Wealth Manager of the Year at the 2017 Women in Finance Awards.
What are your high-level observations on how the wealth management landscape has evolved over the years?
The industry has certainly evolved a great deal over the years I have been involved in it. Firstly, I would say that the regulatory landscape has become wider and more encompassing. Of course, this increasing regulation has brought positives, such as providing more transparency on performance and fees. However, it is now the case that wealth managers cannot benefit from illiquidity premia, as some investment products are curtailed for private clients.
Secondly, over the years, private clients have become more discerning on how they want to invest and the impact that they can make on society with their wealth.
What do you see as the dominant trends in how multi-family offices and wealth managers operate in the UK?
Family offices and wealth managers are constantly looking for more bespoke and tailored investment solutions. The fiduciary duty that we have in this industry is more important than ever and so, firms are focused on finding investment solutions that are focused on the client and their bespoke wealth objectives.
In addition, I believe that the industry will become more bifurcated, between low cost ‘roboadvisor’ solutions on the one hand and higher fee, bespoke solutions on the other. This segmentation of the industry will become much more important over the next decade.
Have you noticed a shift in focus on factors versus traditional asset-class diversification?
Yes, definitely. Given that the traditionally negative correlation between equities and bonds tends to (and has this year) flip positive in inflationary environments, as investors we have to focus more on factor exposures, as well as sector, regional and sub-asset class exposures.
What do you see as the biggest challenges for wealth managers today?
As mentioned before, I think that one of the biggest trends in the industry is the competition for capital between passive/’roboadvisor’ solutions and bespoke wealth managers. Given this environment, wealth managers need to be cognizant of how they can add value over and above what these other solutions can offer, be that through illiquid/alternative investments.
How does your organization select new investment opportunities?
We select new opportunities through a combination of top down views and bottom up analysis. For example, if we believe that the opportunity set is there for event investing, we go out to find the most appropriate event manager for our clients. On the other hand, if we are looking for a value strategy, it is a more bottom up screening process that involves reviewing the universe.
How do you approach asset allocation and diversification?
Asset allocation is a key differentiator in a bespoke wealth management solution. It is very much the cornerstone of what we do. Diversification is the ‘free lunch’ so to speak that we hope to benefit from as investors.
At LGT Vestra, our asset allocation and diversification come from a qualitative committee discussion of macro views. The benefit of making this decision at a committee level is to ensure debate and make sure that one consensus view does not dominate.
Can you discuss your thoughts on leveraging technology and quantitative tools in your investment process?
Technology and quantitative tools are vital in our investment process. They help us to create a foundation, from which we can launch a qualitative discussion. In this respect, using Venn has been very productive in my work.
How significant in your view are wealth managers as players in fields such as impact investing and sustainability?
Wealth managers will be a part of impact and sustainable investing for the foreseeable future. As fiduciary custodians of our clients’ wealth, we have to take into account individual preferences for sustainability and ethics. When this is done on an individual level, it can be incredibly powerful and have a direct impact on the wider society.
What are the most important things when communicating with your clients?
Simple, clear messaging, free of jargon and excessive quantitative information.
How did you start your career in wealth management?
Having done 10 years in institutional asset management, I wanted to focus the next stage of my career on where my investment decisions would have a direct impact. Therefore, I chose wealth management, as it brings you much closer to the client, with all the joys, pleasures and challenges that come along the way. Despite the limits on the size and scope of investment solutions for private clients, which may not be the same as institutional asset management, it is very satisfying because of the direct fiduciary responsibility of managing client money.
What were your major influences to get to this stage in your career?
I would say that first and foremost, hard work has got me to this stage in my career. However, even despite this hard work, I could not have gotten to where I am today without the accompanying passion for finance and investing. As well as this, I am very lucky to have had some very good mentors who have given me guidance along the way.
