Kate Hollis has joined Towers Watson’s credit research team. She joins after 10 years at S&P Capital IQ, most recently as global head of fixed income and alternatives research.
What did you want to be when you grew up?
My father worked at the Stock Exchange and I found his job interesting, so I always intended to go into the City.
What was your favourite subject at school and why?
Maths was my best subject, but I preferred History because it was more interesting (and better taught).
What was your first paid role?
A holiday job selling Christmas decorations in a shop in Kuwait. My first investment job was as a blue button (junior trader on the trading floor).
What led you to a career in investment?
My first proper job was in a stockbroking company and I have never wanted to move from this area. However, I quickly decided fixed income was more interesting than equities, so I have specialised in this for the last 30 years.
What are your priorities for this new role?
To identify the best fixed income products for investors at the best value, particularly in smart beta. There are a number of behavioural factors that are widely used by active fixed income managers to add ‘alpha’: we believe they can be systematically exploited to produce better risk-adjusted returns than passive funds at a lower cost than active mandates.
What is the biggest hurdle for institutional investors at present?
The very low level of long-term real returns and declining liquidity in fixed income. We are actively researching illiquid long-term assets with secure and predictable cashflows, as we believe they add return for investors with the time to take advantage of the illiquidity premium.
What change would you make to investment legislation/regulation?
I would ensure that proper consideration is given to making sure open-ended investment products offer investors liquidity commensurate with what is available to fund managers in the underlying market. I would also ensure that trading costs are set at a realistic level so long-term investors do not pay for trading by those with shorter-term time horizons.
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