In conversation with Emmanuel Deblanc

Before getting into the investment industry, how did you make your first pennies?

Chess is a passion of mine, and I used to play it competitively. My first pay cheque was actually from winning a chess tournament – I was 17 and it was in France!

Tell us about the early days of your career – how you came to work in the investment industry, where your first post was and what motivated you to go down the private markets route? 

I was relatively young when I realised that I wanted to work in finance as it played to my strengths. I thought: ‘I’m ok with numbers and that’s a differentiating factor.’ This was a key attraction and motivation behind my desire to join the industry. When I saw a job advertised in the Financial Times, I applied as back then, that was the reference point to get a job, and a good source for discovering opportunities. My career began as a financial modeller – a quant in a joint venture, which included S.G. Warburg and Bechtel. It was basically a job mixing coding and finance, which I thought was quite interesting. At the time, the word “coding” when combined with finance considerably narrowed the field of candidates. 

What did the journey up to CIO entail – what was your hardest challenge and what did it teach you?

Learning to adapt to a world where you’re not doing deal after deal, and adapting your mind to slower processes or longer-term horizons are certainly important aspects behind the role. But the other is: how do you get there? Dealmaking is quite addictive and over time I learnt to convert jobs and tasks into deals, but it was a major change of environment.

The direct – and sometimes blunt – language of dealmakers is occasionally required in a transaction to get things moving. That can be in stark contrast to the culture in a corporate setting, where you need buy-in from a wide range of stakeholders over what feels like longer time periods. 

In your view, how does the art of dealmaking fit in with this competitive era that we live in now? And for those early in their career looking to work their way up the ladder – be it in private markets, equities or bonds – what would you say to them when it comes to dealmaking? 

I would suggest that you need to think in a non-binary way, it’s not a simple yes or no. There can be more caveats in negotiations – ‘yes, but’ or ‘no, but’. This could be either meeting someone halfway, finding an alternative to a status quo, and overcoming disagreements or opposing views.

Similarly, this can help the other side. They can actually hear what your need is, and start their sentences with: ‘No, but’, or preferably: ‘Yes, but’, and work through those conditions.

To me, that’s what the art of the deal is. It’s about respecting and listening to the other side and being seen as a viable counterparty. There are obviously other types of negotiating and everyone has to do what’s right by their own personality and style. In terms of value for us at M&G Investments, demonstrating consistency, respect and the ability to truly listen to others goes a long way.

As far as going up the ladder though, I would highly recommend ignoring the ladder and instead focus on getting the job done, exploring new ideas – it pays off more than talking about doing things. 

Private markets are at a key point in their journey given their broadening appeal with investors. As they are no longer the preserve of institutions only, what’s your view on their appeal to a wider range of investors – and what are the key barriers and opportunities? 

I think that we are somewhat at a turning point. We’re growing and it’s really been quite fast in the credit space in recent years, and for some of the segments – be it core real estate or infrastructure – the real interest rate rise has created some tension in the system, and even slowed down the deal flow in some cases. So, we’re in a maturing stage, a normalisation where we’re not riding the wave of quantitative easing , and therefore we’re probably on our way to a more sustainable level of demand that’s based on the healthy benefits of private markets as opposed to those which may be linked to a point in time, or macroeconomic policy by some of the main central banks – what one could describe as the “private markets tourists”.

At the same time, we’re getting new demands and that’s a maturing position on the traditional investors in the space, or the institutional side. On the other hand, we’ve also got new demand coming from the high-net-worth individuals, from the wholesale retail market. We are at a turning point because we’re seeing a greater ask for private market asset classes in the main, and that should provide the second phase of growth in this space.

It’s a normal part of growing up. We’re gradually expanding the universe of investors with limitations in terms of the needs of those investors – the need for them to be educated, their liquidity needs or constraints, and in terms of risk profile, having a proposition out there for the market for these new investors that is offering diversification from day one. That’s what we try to position: access to a well-diversified book early in the investment process as opposed to the institutional side, which can afford to wait to build up an exposure over a number of years. 

If we look at markets as a whole, what’s your top concern and your biggest source of hope and of those, which do you think will come to dominate? 

My biggest source of hope from a private markets perspective is that we’re just at the beginning. Looking at the new areas of the economy that need to be funded, I believe there’s a fundamental need for private markets to get things going in terms of transition, climate-related strategies. Where you have an emerging segment of the economy, new technologies, a nascent regulatory framework, that’s where private markets can add value, in my opinion.

What we also see is that as private markets mature, more options, products and segments are being developed and that’s the natural course of business. Therefore, our role is to see how we can best match investors’ appetite or needs with those segments and it really is quite exciting to see this happening over the years, where we are initially helping to create a market, a niche, that may become mainstream a few years later. 

What are your favourite sources of information for investments but also global affairs, geopolitics, culture and sports? 

The Foreign Press in the main (American and European), which I find extremely useful as part of gathering a wide range of perspectives. I also read Foreign Affairs, I think it’s helpful in getting a longer-term view on the geopolitical dimension. 

What’s your favourite town, city or country and why? 

For me it’s Stockholm, I love the city and the architecture. You could say it’s the Paris of the north! There are amazing restaurants, good cultural venues and it’s a great place to do business. It feels straightforward, it’s a rather welcoming society, socially and business-wise and they’ve got a lovely, pragmatic approach there. There’s also no fear of innovation in that country. 

What do you like to do when you’re out of the office? 

My favourite pastimes are kitesurfing, squash – and playing chess, of course! I go to Cabarete in the Dominican Republic and Akyaka in Turkey. The Dominican Republic has amazing waves and Turkey’s got very reliable wind. 

What advice would you give to somebody early in their career in the investment industry? 

Don’t be afraid of having new ideas – and express them, don’t be afraid to be bold. If you see a theme, if you spot a pattern, don’t hold back, express yourself and push for it – don’t have the remorse of not having pursued a new idea. It might be a good idea. That would be my piece of high conviction career advice. 

The value of investments will fluctuate, which will cause prices to fall as well as rise and you may not get back the original amount you invested. Past performance is not a guide to future performance. The views expressed in this document should not be taken as a recommendation, advice or forecast.