We recently chatted with BlackRock’s Fixed Income Strategist Scott Thiel to learn more about him. This post features highlights from our discussion, including details about why he decided not to go to law school, how he approaches investment strategy and why he advocates moving during one’s career.
It’s the latest installment in an ongoing series of Q&As with BlackRock investment strategists. The last one featured Kate Moore.
Q: How did you know you were interested in finance when you were younger?
A: It really was kind of by happenstance that I got into finance. It wasn’t a lifelong dream starting out. When I graduated college, I thought I wanted to be a lawyer, and I starting work as an intern at the law firm Skadden Arps. My career began just when the stock market crashed in 1987 – not an auspicious beginning! I remember I’d worked all night and went outside to get the New York Post (this was before the Internet and electronic news services), and the stock market crash was all over the headlines. After Skadden, I went to work in the analyst program at Goldman Sachs and then applied to law school.
I got promoted to associate the same day I got into law school, and I had to make a decision immediately. I walked around the block by 85 Broad Street [Goldman Sachs’ then headquarters], and I decided to stay at Goldman. I worked at Goldman in New York, London, San Francisco and then back in New York until 2002.
Q: Why did you choose finance?
A: I really like immediate results. The one thing about law I didn’t love was the very long nature of it. So, one of the things about the investment side of finance I thought was interesting, appealing and still true is that you are right or wrong right away. Obviously there are things about it that are longer term and strategic, but there is an immediate mark-to-market on a lot of what you decide.
Q: How did you end up at BlackRock, where you’ve had multiple roles within Fixed Income over the past 17 years, including Deputy Chief Investment Officer and head of global bond portfolio management?
A: During my last couple of years with Goldman Sachs, I worked as a derivatives sales person in New York. I covered this new asset manager called BlackRock and developed a very good relationship with the firm. My specialty was the global markets – not just the U.S., but also Europe and the UK. Back then, the euro didn’t exist and each individual European country had its own currencies and many had their own futures contracts. So, as BlackRock evolved, and the founders wanted to expand its portfolio internationally, they asked me to join them and become a portfolio manager in 2002.
Q: What is your approach as a fixed income strategist?
A: Because I was in investor roles at BlackRock for 17 years, I have a very intimate understanding of what it means to make tactical and strategic investment decisions and take risk in the short and long terms. That is my value add. I really put myself in the mind of the investor and couch everything from that perspective.
I also focus on the BlackRock Investment Institute (BII)’s deep fundamental research, which I believe to be one of our strong competitive advantages. This macro research is behind our view that we will likely see upside growth surprises in 2019 in Europe and China, while U.S. growth will likely decelerate but not collapse. It forces investors to think about assumptions they make and their conviction level. It also translates into very specific asset allocations in fixed income (read more about Scott’s fixed income views in his Fixed income strategy).
Q: What was the biggest challenge of your career?
A: From a career perspective, the biggest challenge was building the global bond business at BlackRock and running it for 15 years, putting it on a trajectory that will take it into the future.
From an investment perspective, the biggest challenge was the Greek government bond position I had in 2010. I ran the European bond funds at the time, and we had an overweight in Greek government bonds. That was right around the time of the first European Central Bank bailout of Greece. The bonds had dropped significantly in value as the global financial crisis moved into the European peripherals. After the news of the bailout, bond prices recovered sharply over the ensuing few days. That was a period when I really learned about conviction and portfolio sizing.
Q: What career achievement are you most proud of?
A: Building the global bond business at BlackRock – to build something that is going to last.
Q: What is the toughest part of your job?
A: Dealing with all the information. There is so much information that you can gleam from different sources and different markets. You could spend all day reading, but you can’t do that. I focus on the information I believe is important, weeding out the rest. There are a number of strategists whose publications I read constantly. And when I read the newspaper, I read the opinion page first because to me, that is the value add. It’s a derivative of the front page, taking the front page a step further to what people think about the news.
Q: What is your favorite part of your job?
A: Definitely the market. It’s the ever-changing, ever-testing, ever-interesting epicenter component to what we do.
Q: What advice would you give to young people just starting out their careers?
A: You succeed in the finance business if you last a long time. It’s a multi-decade career, and you have to treat it like a marathon, not a sprint. You can’t run as hard as you can all the time because you’ll burn out. You have to pace yourself and keep your goal in mind, not trying to get everything done in two years.
I also think moving at some point in your life is important. I’ve moved from New York to San Francisco back to New York and from New York to London, where I’ve lived for the past 15 years. If you have the chance to change geographies and try something new, grab ahold of that. It gives you a whole new set of experiences and adds an interesting twist to the whole thing.
Q: What are you interested in or involved with outside of work?
A: I’ve been on the board of the American Society for the Prevention of Cruelty to Animals (ASPCA) for more than five years as Chair of the Finance Committee, and I spend a lot of time on that. I have three dogs and protecting and bettering the lives of animals is something I really care about.
I have three kids, one at college and two at home. I do a lot of sports. I did triathlons and marathons when I was younger. I still run when I can. I like to play tennis, and I can still (just) beat my 16-year-old son.
For more, read posts by Scott Thiel, and stay tuned for the next interview in the Meet the Strategist series.