We are very pleased to announce that FIIG has appointed leading credit analyst and fund manager Mark Bayley to the position of Head of Credit Strategy and Research
Mark’s appointment, following a long period as Credit Strategist at corporate advisory firm Aquasia, is an important step in further strengthening FIIG’s market-leading research capabilities.
Mark is an experienced and highly-awarded analyst and strategist who has long been a prominent commentator on fixed income markets, with a daily credit market commentary called “On t’Mark”, a regular column in
The Australian Financial Review and a weekly spot on the Sky Business Channel.
At Aquasia, Mark was responsible for performing single-name corporate credit analysis and providing a macro strategy overlay for Aquasia’s credit fund as well as advising corporate clients and institutional investors on developments in the financial markets.
In his new role, he will manage the FIIG research team while providing macroeconomic commentary and detailed credit analysis for our clients. He will also help to buildout existing and develop new relationships on the client and corporate sides of the business.
Yorkshire-born Mark has spent his entire career in the fixed income markets. He graduated with an economics degree from Downing College, Cambridge University and his first job was at Kleinwort Benson in London before working at various financial institutions including JPMorgan, ABN AMRO, Commonwealth Investment Management and Aquasia.
When he is not dissecting a balance sheet, Mark can be found coaching the mini rugby team of his daughter Emily, 7 and watching his son Ethan, 5, play. He occasionally finds time to get to Fortress Brookvale to watch his NRL team, the Manly Warringah Sea Eagles.
Below, Mark discusses what brought him to Australia, his best ever day on the job, and the top lesson he has learned about fixed income investing.
How did you get into fixed income?
Straight out of university in 1996 I joined UK-based merchant bank Kleinwort Benson on their graduate trainee program. My first placement was on the UK Government bond sales desk and then I rotated into credit research. I basically haven’t left that area of global markets for the best part of 20 years.
I came to Australia in 1999 on a working holiday and worked for the precursor to Colonial First State – Commonwealth Investment Management. Then I went back to the UK and joined Chase Manhattan – which soon became JP Morgan – and worked there for a further seven years. In 2007, I came back to Sydney to work for ABN AMRO as Director of Credit and Structuring.
What brought you to Australia?
I had a bit of a taste of life in Australia on that working holiday and despite the usual whinging from the locals, the quality of life is fantastic. Compared to the UK, the culture is more outdoors, sporty and it is just a great place to bring kids up. In the UK there are only two months of the year that you can actually do things outside and the rest of the year you just have to embrace and enjoy the wind, rain and cold!
What attracted you to FIIG?
FIIG is the preeminent high-yield origination house in Australia and the bulk of my career has been spent in high-yield corporate research, so it is a perfect match for my experience and skill set. It’s also an opportunity to manage a research team which is one of the largest if not the largest in Australia on the sell side and to take that very strong research and make it even better.
I will be trying to add some incremental value across all of FIIG’s businesses not just in research but also in distribution and origination. I’m looking forward to meeting all the new clients and my new colleagues as well.
What is the single most important lesson you have learned about fixed income investing?
There’s usually no upside only downside. If we get our investment thesis right, we just get our coupons and principal back. That means we actually have to protect downside. You do that by being conservative in terms of the profit forecasts and make sure you understand the documentation and the covenants because in a downside scenario that is what’s going to help minimise your losses.
What is your favourite part of your work?
The fact that each day is different. It depends on what’s happened overnight in the markets and the recent releases of economic data to drive what’s going to happen in your trading day. In high yield, I like the fact that you’re analysing credits which only a few other people analyse, so you can really add value. If you’re covering Telstra or BHP from the equity side, which are covered by dozens of analysts globally what value are you really adding to the overall picture? In my view, not much!
But if you’re covering a high-yield corporate that isn’t covered by any other sell side house in the world then you have the opportunity – and it has happened – to move bond prices by five to 10 points by publishing a well-researched report.
What was your best ever day on the job?
I was helping to originate a bond deal for Weetabix (which didn’t eventuate) and I got to go to the factory to see how they were made. As someone who has had three Weetabix (now Weet-bix) every morning for the last 35 years that’s probably one of the more interesting days in (or out of) the office. A close second was going to a United Biscuits facility that made Jaffa Cakes and Rich Tea biscuits.
Worst ever day on the job?
Over ten years ago we originated a European high yield deal which failed to perform as expected and eventually went through a financial restructuring. On the plus side, by the time it started to become a distressed credit we did have a sell recommendation on the bond and I did progress on a steep learning curve about the restructuring process. Nevertheless it was still disappointing to see a large company and management fail in pretty dramatic circumstances.
Do you have any hobbies?
Basically I just try to keep fit and enjoy any type of sport. Unfortunately, my rugby playing days are over (not even Golden Oldies) but I still manage to do a few cricket nets. A few years ago I started to do ocean swimming ‘races’ but with the kids’ Nippers my Sunday morning races have been put on the back burner. I also spend time coaching my daughter’s rugby team.
I still support England in rugby and cricket but Australia is my second team. I support the Sea Eagles in the NRL and perversely I support Queensland in the State of Origin; when I was out here in 1999, I didn’t have any allegiances so I went for Queensland – so you can blame Gorden Tallis for that. A pretty lucky choice in hindsight! Away from that, raising two fun-loving kids with no family in Australia is a full time job, which my working wife manages efficiently; when I can, I hope that I help rather than hinder!
Mark is based in the Sydney office. He can be reached on (02) 9697 8761.