Interview with Gavin Lewis – “The changing face of distribution”

We are delighted to continue our Distribution Leadership Interview Series with Gavin Lewis, Managing Director, Head of UK Institutional Client Business at BlackRock.

Gavin is responsible at BlackRock for the strategic direction and growth of the UK Local Government Pension Scheme segment.  Previous to this, Gavin held several leadership roles at Vanguard Asset Management including Head of UK Institutional, Head of UK Retirement and Head of European Consultant Relations. Gavin has also held positions UBS Asset Management and Russell Investments.

Gavin is a member of the asset management industry diversity project steering committee, he co-leads the ethnicity workstream and is a co-founder of #Talkaboutblack a movement dedicated to increasing the representation of black individuals in the corporate world.

Gavin’s social media campaign #IAM through #Talkaboutblack has been influential in challenging the industry to confront systemic racism and he has won a series of awards for this campaign including the prestigious Financial Services Leader Winner at the Black Business Awards. The campaign is now fundraising for social causes impacting Black communities, successfully campaigned to for a petition to debate the ethnicity pay gap in the House of Commons, as well as working with companies to improve the experience of their Black employees.

Here are some of the insights he shared with us on the evolving distribution function and landscape:

Amanda: “Thank you for taking part in the leadership insight Gavin. We’re delighted that you have decided to take part.”

Gavin: “It’s a pleasure Amanda.”

Amanda: “So first question: I know I’m here to interview you about your distribution day job but in light of the all the fantastic work you have been doing to challenge our industry to become more diverse and inclusive, I have to kick off with asking  you about this key issue. It would be great to hear more about the different initiatives you are involved in – from the Diversity Project, to your social media campaign and the fundraising for social causes impacting black communities.”

Gavin: “When we first launched the diversity project, the initial brief was to focus on BAME. From the outset, myself and the team felt that this was a difficult task, primarily because every characteristic within the acronym represents a different challenge. Whilst each group is equally important, the group focused on black and set out a range of challenges that black professionals face. Primarily, there were five issues that we felt need to be overcome:

  • Societal Inequalities – Black people are disproportionately victims of crimes, health inequalities, unemployment
  • Underperformance in education
  • Inability to enter the corporate world – the corporate world is not seen as a place for black graduates and professionals to flourish
  • Higher rates of attrition and lower rates of progression – there are very few senior black professionals
  • People are not willing to talk about the inequalities

To overcome these inequalities, we launched a range of initiatives, namely social media campaigns and talks, to get people discussing the subject.  To enhance career progression, I run a ‘Mentor C-Suite’ initiative, where 15 CEOs or Fund Managers mentor 15 black professionals, as well as mentoring circles for entry and mid-level black professionals. We also run insight days, where we look to attract black graduates to the industry, as well as jobs fairs. In addition, a school program has also just been launched, for children attending schools in disadvantaged areas, teaching children lessons that will hopefully encourage and provide them with a roadmap and the right foundations to build strong careers.”

Amanda: “Sounds fantastic. Great to see that you are so proactively addressing this at different levels and entry-points into the industry. It really is inspiring and I don’t know how you find the time to do all this as well as your day job!”

Gavin: “I have to say I’m very fortunate to be working at BlackRock as the business has been very supportive of all the work I do and very much champion these initiatives internally. This has meant that the there is less separation between my day job and the other industry-wide initiatives I’m working on.”

Amanda: “Right, back to the day job, as I know you have been interviewed a lot about all the incredible work you have been doing around D&I but as you mentioned at the start of our conversation, it’s also a nice change to be asked about your “bread and butter” – institutional distribution and client relations!”

Amanda: “ It would be interesting to hear any thoughts or observations you have on how the distribution function has changed since you started out in the industry?”

Gavin: “There has been considerable change across the board, in that the structure of the market has changed, the investment landscape has changed and finally the industry has changed. From a macro perspective, geopolitics and populism have been key drivers of change and technological disruption is challenging the industry to adapt and evolve. There has been a clear convergence between ESG and values which has put a spotlight on behaviours and has put purpose at the forefront of the agenda. Specifically, within distribution there are two key shifts that I would highlight:

  • The change from Defined Benefit (DB) to Defined Contribution (DC) pension schemes – there is currently a maturing of DB, leading to the rise of DC, which factors into discussions of how to achieve growth, when previously it was purely a growth discussion.
  • Vertical integration of retail and wholesale. It is now much more important to establish a strategic direction, whereas before it was more about finding a product and executing, which has fundamentally changed. There is even much more of a blurring of lines between institutional and wholesale/retail with more of an institutional approach now being seen within these channels as a result of clients having access to greater wealth of information and as consequence becoming more and more sophisticated.”

Amanda: “Interesting. We have also seen this with the movement of personnel between the different client segments. Institutional and retail salespeople used to be chalk and cheese and now the skillset is much more interchangeable!

Amanda: In terms of approach to distribution, specifically the way distribution personnel operate and sell product, has this fundamentally changed?”

Gavin: “For me, approach to hiring has been key here. 10 years ago, the focus on hiring was about a potential hire’s network and who they knew in the industry. The skillset required now is more analytical, strategic and solutions-oriented in order to understand different market conditions and the opportunities and challenges for clients that this presents. The world is beginning to see a new breed of investment professionals, namely younger CIOs and more diverse CEOs.”

Amanda: “In what ways do you think Covid-19 will change and have an impact on the way distribution personnel do business in the future?”

 Gavin:Covid-19 is accelerating themes that have already been in existence. ESG and the durability of sustainable investing are increasingly coming into focus. As is employee welfare and engagement with a spotlight on how companies treat their staff on a personal as well as professional level. Practically, it is becoming more acceptable to have a call, which means it isn’t typically necessary to spend a whole day travelling for one meeting. There is however a fine balance between efficiency and maintaining relationships, which is best done through face-to-face contact.”

 Amanda: “As a final question, when thinking about how you position and build out the institutional business over the next period at BlackRock – what’s on your mind and what will you look to do differently?”

Gavin: “For myself and the team, we want to develop relationships across the business and create efficiencies around providing and rolling out a whole joined-up portfolio solution. In terms of other areas that are at the forefront of my thinking and will be key forces for change in the coming years. Purpose and mission will continue to play a critical role, sustainability is a huge focus now and will be in the future and doing the role that we do, a key question is how to create greater connectivity in order to further entrench relationships looking forward.”

Thank you again to Gavin who kindly gave up his time to provide us with these insights.

 

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