When Harriet Steel was in her late 20s she was warned off a career in asset management.
She recalls now that at a job interview conducted by the chief executive of an asset management company he told her he would offer her a job “tomorrow” but that moving into asset management at that stage in her career would bore her.
While she heeded his words at the time, Ms Steel eventually came round to the idea.
She started out in the City in 1991 at American financial firm Bankers Trust, which was later acquired by Deutsche Bank.
“Bankers Trust at the time was one of the big proprietary trading houses and everyone who joined started out by learning how to trade. I ended up on the currency options desk. The currency markets were really active at the time,” she says.
The banking group’s initiative to build a client business off the back of its expertise in trading derivatives was in “full swing”, according to Ms Steel.
“So anyone that they perceived as being able to speak to clients… was encouraged to be involved in that side of the business, so that’s how I got into sales,” she explains.
“I was basically involved in currency, fixed income and derivative sales to corporate clients and what we sold to them was balance-sheet hedging solutions for their currency and interest rate risk, as well as overlay trading-type positions. I did that and ran a client franchise at Bankers Trust and then went on to do that at Morgan Stanley.”
After eight years of being involved in investment banking and capital markets, she grew curious about fund management, although her encounter at the now infamous job interview deterred her from making the transition.
“But it was obviously something that had come onto my radar given the longer term nature of it and the investment time frames. I thought it just seemed interesting,” she recalls. “But that wasn’t the next thing I did.”
Instead, Ms Steel married, became pregnant with her first child and relocated to Monaco for her husband’s job, prompting her to rethink her career.
She remembers: “I had to go and resign from my job at Morgan Stanley. To me that felt premature, I didn’t really want to do that, I was making great progress there. So we moved abroad and I found myself in a situation where it wasn’t easy for me to work, so I just decided to surrender to the whole family thing and go on and have three children. In fact, I took a good five years out from my mainstream career, albeit I was still active.”
She goes on: “My husband was involved in private equity and he was part of an investment syndicate, so was investing as a principal but also doing friends and family fundraisings around those investments, and I kept my oar in as a principal investor, working with him on some of the friends and family fundraisings.”
Following five years of less formal work, Ms Steel took on a more structured role.
“I ended up in the hedge fund space raising assets for hedge funds. I’d like to say it was by design because this was in the early 2000s and [that] I just caught that amazing zeitgeist, but in fact it wasn’t,” she admits. “It was completely by default and it was in response to an ex-Bankers Trust colleague founding a hedge fund and asking if I wanted to be involved to raise the assets.”
Before she knew it, her job assumed “a life of its own”, as she puts it, and rather than working for one hedge fund manager, she ended up with multiple mandates, out of which a business grew.
She elaborates: “The idea was we would start with hedge funds that didn’t have a huge amount of assets under management – anything from $60m (£39.5m) to $200m – and then get them to the next stage.”
Unfortunately, the financial crisis of 2008 had other ideas for hedge funds and Ms Steel found herself winding down the business between 2009 and 2010. “So of all the assets we raised, the very liquid stuff, while it had returned great returns to investors in 2008, was the first to be redeemed,” she explains. “There were other investments that were less liquid and had been gated and those investors weren’t able to redeem, so those assets were in for a little bit longer.”
The experience left Ms Steel wondering where her career would go next, although she assumed she would remain in the alternative investment space.
That is, until her interest was piqued by a role at Hermes Investment Management. All Ms Steel knew of the company was its association with the British Telecom (BT) pension scheme, but she was told it was “diversifying to become an independent third-party asset manager” and when she “looked under the bonnet and saw the great investment track records that were here across a number of different asset classes, I could see the opportunity”.
“It didn’t take me long to recognise that here was a platform that was backed by a pension scheme. That in itself was unusual and a model that would have been harder to make work back in the heady days of 2006 and 2007. But one that I felt had a real resonance in this post-financial crash landscape.”
She observed that Hermes was already running a number of strategies for BT as the main investor and that they could find a way to create appropriate access for other investors.
Says Ms Steel: “At the end of 2011 when I joined [as global head of business development] there was an opportunity to build the sort of business development platform that would be able to capture opportunities across the complexities of the platform. We were running a lot of different strategies across asset classes and we had to structure something around some very specific channels and regions where we saw the best opportunity for our value proposition.”
So she was tasked with establishing a sales team that could sell across a range of asset classes. Her approach was to pluck people from different backgrounds.
“I think when you’re a young business and a growing business and you don’t have a well-understood and articulated brand yet, you need a very different sales team than you do if you’re a mature business that has a well-recognised brand in the marketplace,” she reasons.
Since then, the company has grown and third-party assets now account for nearly 40 per cent of revenue, up from 8 per cent in January 2012. She insists there is still work to do, though.
Ms Steel’s career has seen rapid progression since she joined the fund manager too. She is now on the board.
She reflects: “I guess that the promotion to the board in 2013 after I’d been here for two years was a natural career progression, having delivered on the third-party revenue front and for my part in contribution to corporate strategy.”
While her career in financial services has been varied it was also rather accidental, as Ms Steel originally set her sights on becoming “a great architect”, studying architecture at university.
She admits: “I think there are many people like me who started off with a different ideology, what they thought their career would be, and ended up in financial services. I don’t regret it in any which way. In fact, the minute I joined Bankers Trust I realised that I was enjoying it immensely. It was very stimulating; the pace was fast and furious.”
“It’s taught me a lot and I’m grateful that I’ve had such a varied experience,” she says. “I think it’s really helped me in this role. It’s helped me be pragmatic, commercial, incisive in decision-making and perhaps creative.”
CV
Harriet Steel
October 2013
Appointed to the board of Hermes Investment Management as executive director
2011 – present
Global head of business development, Hermes Investment Management
2003 – 2011
Co-founder and managing partner of Portico Advisors
1996 – 1998
Executive director, fixed income, Morgan Stanley
1990 – 1996
Vice president, global markets, Bankers Trust Company
1988 – 1990
Acquisitions analyst, Regalian Properties
