Ignacio Ramirez: Fixed Income expert and LinkedIn influencer
Ignacio studied business administration in Spain, spending exchange semesters in England and the United States before joining the Copenhagen Business School and the Stockholm School of Economics for a master's in business and international economics. His foray into private banking came about serendipitously. Ignacio was in the final interview rounds with a big pharma company when he received an internship offer from HSBC. He joined the LATAM relationship management team in London in 2011.
"I finally had the opportunity to see the theory intersect with real-world implications. I exchanged with clients daily, explaining how economic policies influenced their portfolios. It was fascinating." While Ignacio's sociable personality could have easily led him to client-facing roles, his heart lay in the nitty-gritty of the markets. As luck would have it, a position opened in HSBC's Fixed Income team.
Central banks had progressively lowered interest rates following the Great Financial Crisis of 2008. This trend culminated in 2016 in historically low rates (while Ignacio was working at BNP Paribas), leading many investors to dismiss Fixed Income assets due to the low interest rates offered.
Working in Fixed Income was a challenge. I remember colleagues reminiscing about the 1980s when investors could clip a double-digit carry without taking significant credit risk. In 2016 I was happy to find opportunities with a 3%-4% yield.
Ignacio joined Pictet in 2018 as Fixed Income Advisor. Today, his job on the investment platform combines views from different teams (e.g. Credit Research and the CIO Office) to provide digestible investment recommendations to clients whose appetite for bonds has recently rekindled.
The recent inflationary cycle has triggered a change in monetary policy and a rise in interest rates, making Fixed Income more appealing again. "Higher yields since early 2022 made Fixed Income an attractive investment opportunity again. Now we need to raise awareness among colleagues and investors about the intricacies of bonds."
The asset class is broad and complex. In addition to credit's interplay with market forces, some companies offer hundreds of different bonds. An issuer like Bank of America has hundreds of bonds. And the risk profiles of bonds vary significantly, ranging from investment-grade to riskier high-yield . "Today, Fixed Income is incredibly dynamic. Keeping an open mind and learning daily is essential.”
But the topic is not an easy one to convey. "At dinner parties, people ask me and my wife what we do for a living. I try to pique their interest with bond stories ranging from Credit Suisse AT1 CoCos to Venezuela or China. Then my wife says she's an art advisor, and their eyes light up!" So Ignacio decided to change his approach.
As investors, we usually get lost in technical details and financial jargon that outsiders don't understand. People need emotions, relatability and storytelling.
Ignacio started demystifying complex financial topics and sharing his insights on LinkedIn (after double-checking what he could and couldn't do on the platform). He shares astute comments on financial markets and creates engaging visuals on various topics, from ESG to interest rates. "Even people without a financial background started showing genuine interest. And I had the chance to meet and interact with many individuals, from colleagues and job candidates to client prospects."
But his success on LinkedIn didn't happen overnight. "It requires time, effort and planning to understand the LinkedIn algorithm, create engaging content and interact with your audience." Fortunately, being on top of current macro events and financial markets is Ignacio's job. And Ignacio can summarise complex information from multiple sources fast. He seeks inspiration from other 'finance creators', especially those with 10 to 30 thousand followers, as they are more accessible than those with audiences in the millions. Ignacio's beginnings as a content creator (November 2022) coincided with the boom in generative AI.
ChatGPT is helpful to generate analogies. I would never have thought to draw a connection between Mickey Mouse and Silicon Valley Bank. Leaving new features aside, the tool bases its answers on information dating back to end-2021, it still has limits and doesn’t always provide accurate data.
Ignacio envisions a future where finance professionals become “modern-day centaurs” blending human and machine intelligence. "Automating part of our jobs will allow us to focus on high-value tasks requiring critical thinking and empathy. Sure, there are risks, but I believe the positive outweighs the negative. I’m excited and positive about the future of wealth management."
With such a busy schedule and passion, I wonder if Ignacio has time left for anything else. "I love golf and used to play a handicap of 6.5**. But I play less since we have two kids.”
We both have to run to another meeting, but I’ll keep following Ignacio’s content and try to instil some of his passion and curiosity into my day-to-day job.
**The closer to 0 a player’s handicap, the better.
Fixed Income, bonds, debt? A short definition of the asset class
A bond is a fixed-income instrument that represents a loan made by an investor to a borrower (typically corporate or governmental). In return, the issuer promises to repay the original amount plus, in most instances, variable or fixed interest payments.
Macroeconomics and monetary policies can significantly influence fixed-income securities. For example, if a central bank like the US Federal Reserve increases its policy rate, new corporate bonds will have to offer higher interest rates to attract investors. On the other hand, existing bonds with lower rates will become less attractive, pushing their price lower. The opposite happens when interest rates decrease (existing bonds offering higher rates become more attractive, and their price increases).
Governments, corporations and financial institutions commonly use bonds to borrow money. Governments need to fund roads, schools, dams, and other infrastructure. Similarly, corporations and financial institutions will often borrow to grow their business, buy property and equipment, undertake new projects, or hire employees among other reasons.
Bonds are ranked according to the issuer's credit risk. Ratings are divided into two categories: investment-grade (highest quality) and high-yield (riskiest).
Bonds have historically been considered a more conservative type of investment than equities. This view derives, in part, from the visibility of cash flows, which reassures investors, provided the issuer doesn't default.