01 Apr FINANCE MATTERS INTERVIEWS PRAVEEN JOSEPH, EBRD
Name: Praveen Joseph
Based: London, UK
Position: Principal Trader & Portfolio Manager – High grade fixed income, EBRD
By: Maayan Keren Zur
Praveen, please tell us a bit about your background.
I grew up in India and pursued my bachelor’s in engineering at the Indian Institute of Technology (IIT) in Madras. It was during my undergraduate years that I first encountered quantitative economics and realized there was a field I was eager to discover. In the early 2000’s, it was the post-tech bubble bull market and wall street was looking for engineers and mathematicians to work on trading desks. Having heard incredible stories of Wall street jobs, I was determined to find my way to Investment banking. I was 20 years old when I was awarded a scholarship by the J.N. TATA foundation in India to pursue a Master’s degree in Finance at the London School of Economics (LSE) in the UK. There are 2 million people that applied to the scholarship and I was lucky to be awarded the opportunity to be able to pursue my passion in Finance and economics. At the LSE, even though I didn’t have a strong background in economics – my strong background in mathematics was very useful in doing well.
How did you start your career in banking?
When I was studying at LSE I was very interested in a career in trading. It was 2006 and the competition was tough, there were sometimes as many as 60-100 applicants for each available job. I had to go through 27 interviews before I finally got my job offer with JPMorgan Investment Bank in London. How I finally got the job offer was a bit of a funny story, my student visa was about to expire in 2 days after my final interview and I had booked my flight tickets to go back to India. As I was packing my bags to go to the airport, I suddenly got a phone call from JPMorgan with the job offer – I almost broke my phone in excitement, it was all quite dramatic and funny in hindsight.
And how did you go from JPMorgan to your current role?
It’s a combination of persistence and willingness to try different opportunities. I spent four and half years at JP. I loved my job there, but it was stressful and I worked 80 to 100 hours a week. I started to question the work-life balance during my mid 20s and it created an internal conflict. After I left JP, I decided to take a year to travel around the world. When I came back to London I started to work in a start-up hedge fund and then moved to an asset management fund in London. Then, one day in 2013 I got a call for a job interview at the IFC (a member of the World Bank Group). They had an opening for a role in Washington DC and were specifically looking for someone with a strong background in derivatives. It was a different city, lifestyle and job, and I didn’t know what to expect. I’ve been there for four years and it’s been an incredible adventure. I am a portfolio manager and we manage over $40 billion in assets. I am currently on secondment with the EBRD.
You were rather young to take on such a position. Can you tell us a bit more about your progress within the Bank?
In the beginning I started as a supporting junior portfolio manager in the Liquid Asset management team at IFC. I was lucky as there was a job opening for a portfolio manager role three months after I had started working. I was still relatively young and my age was one of the concerns they had, as many of the other portfolio managers were almost 10 years older than me. They wanted me to take over the $5.2 billion structured credit portfolio – an asset class I didn’t have much experience trading. I accepted the challenge and despite my age. In 2015, I invested heavily in the Australian market and I was invited to speak at the Australian Securitization Conference in Sydney and when I arrived there they asked ‘where is the portfolio manager?’ I guess I looked a little young for this role!
That’s very impressive. Do you enjoy your current role?
At the EBRD we are three portfolio managers that co-manage $7bn high grade fixed income portfolio. It’s a unique opportunity because you get to see all the aspects of portfolio management. I am a rational risk taker and I enjoy decision making in uncertain environments more than most other people do. Some people find trading jobs very stressful and they enjoy trading when they make good calls, but find it very stressful when they start to lose money. Over the years I’ve learnt to like my job equally when I lose and make money, it enabled me to learn a lot about myself.
What does a typical day look like, and what gets you the most excited about your job?
We start the morning with Bloomberg. The morning starts with the Asian markets to see what happened there before London opens and the liquidity picks up. I look at 30 chats and follow macro data on Bloomberg, and then I decide where to invest – this is the most exciting part for me. Because of my background in derivatives, I am able to turn unappealing investments into an exciting ones – using basis hedging techniques to generate additional returns for my portfolio, that part of the job is very exciting. It’s like everything else in life, everything changes constantly around and you need to make dynamic decisions with information that’s changing very quickly and I find that very exciting.
Does EBRD require you to integrate specific ESG factors in your investment decisions in your portfolio management role?
There is an exclusion list, but active ESG policy is used only for the primary project financing activity, not for the treasury management.
What are your long term aspirations?
Over the course of my career in development finance, I’ve have realized that there is a big gap in the capital supply-chain, especially in sectors such as education, infrastructure and healthcare. One of the challenges I have observed is a capital gap at the seed stage before larger banks and development finance institutions step in to finance projects. There is huge market for bridge financing, and one of my aspirations is to set up a development finance fund. In the long term, perhaps 20-25 years from now, I would like to be more involved in the policy and governance aspect of financial markets. Raghuram Rajan – ex Central bank governor of India is one of my role models and I aspire to follow in his footsteps and perhaps someday take on a significant role shaping monetary policy in emerging counties.
Finally, advice to young professionals that are entering the world of finance?
When we approach significant crossroads, we sometimes make decisions based on insecurities rather than our hearts – it’s something that I’ve learnt from the markets. Deciding from the heart takes courage, conviction and commitment and this is what I would always advise young professionals: Career is a marathon, not a sprint.