An ex-hedge fund manager, Mark Haefele says that he now has the "greatest job in the world." We caught up with Mark, in his fourth year at UBS Wealth Management, and recently appointed as Global Chief Investment Officer, to find out which factors influence his global investment view, why he particularly enjoys meeting with Asian investors, and what the similarities are between running a hedge fund and jumping out of an airplane.
Mr. Haefele, congratulations on your recent appointment as Global Chief Investment Officer, UBS Wealth Management. What does your new role encompass?
I see my role as a steward of what is, today, a world leading investment process. Since I joined, at the inception of the Chief Investment Office (CIO) three-and-a-half years ago, it has been a privilege to work with a global team of over 900 experts, and to talk with managers, governments and clients worldwide. All doors are open to our investment process, given the size and influence of the assets under our management.
I truly enjoy my work, which involves understanding global political and economic developments, and then using that knowledge to help clients to grow and protect their wealth. In my new role, I will still advise clients on asset allocation and long-term themes, as well as oversee the process that guides our investment mandate positioning.
Before joining UBS in 2011, you were Managing Director of Matrix Capital Management, and previously co-founder and partner in Sonic Capital. How is life as a hedge fund manager similar, and how is it different, to your current role?
Over 25 years ago, I attended paratrooper school, where the objective was to become proficient at jumping out of perfectly good airplanes into a foreign land. Getting safely on the ground was just the start—then, surrounded and cut off from supply lines, we were trained to accomplish our airborne mission. I had colleagues who would joke that I applied a similar mindset and commitment to hedge fund investing. I would often take international trips and return to the meetings straight from a red eye flight with new investments and deals.
My role as a hedge fund manager, and my new role at UBS, are not dissimilar— both require asking the right questions of the right people to better understand how the world works. In both businesses, a culture of investment performance is critical, something that I have tried to instill since launch of the CIO.
What are the benefits of having a CIO office for clients who bank with UBS?
Ultimately, clients want performance and for their wealth to grow and be protected. This is the key reason that the CIO office was set up. Going forward, I believe that we have the most robust investment process of any wealth manager, which will help ensure that the good performance we have seen over the past few years continues.
Please explain a bit more about the investment process – what is it, and what is your role within it?
I like to think of our investment meetings as somewhat like graduate seminars, effectively marrying a top-down approach with bottom-up insights from our regional and individual asset class specialists. This can make for vigorous debate, for example, when top-down signals indicate that an asset class may be attractive, but where our bottom-up analyst has some reservations.
In terms of my role, I try not to impose my views too strongly— the whole idea of the investment process is that it is robust and inclusive. I listen, make sure that all the right connections are taking place within the process, and bring the result forward to the Global Investment Committee.
What are you looking to achieve as Global Chief Investment Officer?
I believe that the true test of any investor, or process, comes when the market environment changes. This may well happen in the years ahead as central banks reduce their stimulus efforts. Such a shift is sure to challenge us all, as the support of central banks has defined the market and, to some extent, guided investment decision-making. I am confident that we have the right people and structures in place to face this challenge. My achievement will be measured by our clients achieving their goals, particularly in more changeable market conditions.
“I always try to stress the importance of global diversification and long-term investing.”
How do you see CIO’s role evolving in Asia Pacific and the Emerging Markets?
Clearly, Asia Pacific and the Emerging Markets are more widely key growth areas, both in terms of business for UBS, and in terms of the world economy. Therefore, from where we sit in CIO, getting these markets right, from both a business perspective and a market outlook perspective, is absolutely critical.
That is why we have been investing in talent in APAC and the Emerging Markets, bringing in local experts, and beginning to build our regional asset allocation teams, to help further improve the quality of our investment advice. In the years ahead, I look forward to working closely with our colleagues and clients in APAC and the Emerging Markets as we work toward fulfilling our client promise.
In general, how would you say clients in Asia are different from those in the rest of the world? And how do you account for these differences?
I really enjoy meeting with our clients in Asia. Many are entrepreneurs, and they often bring the same energy to managing their money that they do to their businesses. They have a strong understanding of financial markets, and an active interest in our tactical positioning and trading ideas, more so than our clients elsewhere in the world.
Of course, with this energy comes pitfalls, and some clients still over-allocate to their domestic markets. When I meet with clients in Asia, I always try to stress the importance of global diversification and long-term investing.
What does the future hold for CIO?
I’m proud of what we have achieved so far, especially in instilling the CIO House View into so much of what Wealth Management does. This is a core part of the client experience, and we hope to repay the faith that clients and client advisors have shown in us with continued levels of performance and service.
We are always evolving and have a number of new projects underway. The next major step is to help bring our regional expertise into our investment portfolios. To this end, we have set up Regional Investment Offices for Europe, Switzerland, Asia, and the Emerging Markets, to complement the strong team focused on the Americas.
Longer-term, our future will be decided by the demands of our clients. We try to remain as flexible and receptive as possible to our clients’ needs and will shape ourselves accordingly.