Olga de Tapia, Global Head of ETF & Indexing Sales at HSBC Asset Management, talks to Shanny Basar about building an ETF business, the importance of male allies, and making sure that women do not end up doing ‘invisible’ office housework.
De Tapia had spent nearly 12 years at BlackRock before she joined HSBC Asset Management in November 2018.
“BlackRock was a great organisation and I learnt so much there, it’s a very mature well run organisation,” de Tapia said. “But given my entrepreneurial mindset I was keen to try my hand at business building.”
Her entrepreneurial mindset was attracted by the opportunity to create an exchange-traded fund (ETF) and index platform from scratch at HSBC AM and she described the combination of taking on a big role and a huge challenge as very rare. The new business was boosted when Nicolas Moreau joined as CEO of HSBC Asset Management in September 2019 from Deutsche Bank where he had been the Management Board member responsible for Deutsche Asset Management. Moreau rebranded the business to DWS and led its listing on the Frankfurt Stock Exchange in March 2018.
De Tapia characterised Moreau as a visionary who has a very clear view of the market and is very client-centric.
“He had great experience at DWS and was an ETF specialist so he is very supportive,” she added. “When Nicolas Moreau joined, the business changed dramatically for me because he understands the importance of the ETF business for any asset manager.”
Moreau invested in the ETF platform and gave de Tapia the support to start building it properly with marketing and sales specialists. In 2020 HSBC AM set out its strategy to reposition the business as a core solutions and specialist emerging markets, Asia and alternatives focused asset manager, with client centricity, investment excellence and sustainable investing as key enablers.
At the end of 2021 HSBC AM announced the creation of the ETF & Indexing unit, which combined the firm’s passive funds, mandates and solutions under a single umbrella. This followed the ETF, index and systematic fund ranges’ passive assets under management increasing from $70bn to $103bn in the 12 months from September 2020, including $18bn in ETFs.
Responsibility for the unit was given to Thorsten Michalik, in addition to his role as Global Head of Wholesale Business and Partnerships. De Tapia, then Global Head of ETF Sales, took on her current expanded role while Guillaume Rabault, CIO of Quantitative Equity, was handed oversight of a dedicated ETF & Indexing team within Investments.
“My direct manager, Thorsten Michalik, has been instrumental for me,” de Tapia added. “I have learnt so much from him and Moreau in driving the right strategy for the business, so I feel very grateful to have male allies,”
Last year HSBC launched more than 14 funds, which de Tapia said was the most within the UK. HSBC AM was ranked number 14 in Europe in terms of assets under management when de Tapia joined, but she said the firm has risen to eighth, with the higher ranked fund managers at double its size.
“I had the opportunity to bring people to my team who had already worked in the ETF industry for many years, so trust was there and we then did an enormous amount of work on branding,” she said. “As a result, ETFs at HSBC AM have grown the fastest in the last three years.”
Three pillars
HSBC AM is creating families of products around three pillars. De Tapia added: “The first is the standard core which is essential for clients and performance is best in class, and was here when I arrived.”
The second pillar is sustainability. De Tapia said HSBC AM mixes sustainability with some of its expertise, like factor investing or emerging markets, as the bank is an emerging markets house. She admitted not knowing a lot about sustainable investment before HSBC AM launched its first environmental , social and governance (ESG) range of ETFs back in 2020.
“I had to study a lot to understand the sector and look for new methodologies,” she said. “Something clicked and I am now passionate about sustainable investments.”
For example, in November 2022 HSBC Asset Management announced the launch of five new Islamic ESG ETFs. They will be classified as Article 8 under the EU’s Sustainable Finance Disclosure Regulation (SFDR) and the index screening methodology also includes a set of Shariah exclusions such as alcohol, gambling and pork related products. De Tapia said there is growing appetite for a range of Islamic passive products as investors look to build Shariah compliant multi-asset portfolios.
Last August the manager introduced the HSBC World ESG Biodiversity Screened Equity UCITS ETF. The fund tracks the Euronext ESG Biodiversity Screened Index series which was jointly developed by HSBC, Euronext and Iceberg Data Lab, the first investable biodiversity screened benchmark indices based on a broad range of equities. De Tapia described the ETF as one of its suite of sustainable building blocks which help investors create portfolios addressing material environmental issues such as biodiversity and climate change.
HSBC AM’s third pillar is thematic, which de Tapia argued allows the manager to differentiate itself with clients, where they need to use a tactical asset allocation.
“We need to keep on growing assets under management specializing on our three pillars and expanding geographically,” she added.
Growth strategy
De Tapia continued that HSBC Asset Management is not a big factory that provides everything off-the-shelf. Instead, the manager is more like a boutique that specialises and accompanies clients on their investment path.
“My sales team is very specialised because we can do a sale from A to Z, so building that team was key,” she said. “ETFs are a commoditised product so service and trust are really important.”
One way of earning trust is by trying to ensure clients understand the market issues. HSBC AM provides clients with macro views and recommends actions, even if it does not have the products to invest accordingly, said de Tapia. She added: “They know that if they have questions about emerging markets, HSBC AM is their point of contact.”
De Tapia also argued that the world has changed significantly since the Covid-19 pandemic as big ETF providers are losing assets for the first time, so HSBC AM has a great opportunity to position itself as a provider of choice. In the “golden era” of passive indexing, investors held index funds in their core portfolios for a long time but de Tapia said passive products are now being used for different purposes, such as short and tactical positions.
“The growth strategy is to build our families of products into solutions for clients and to partner with big entities in Asia and the Middle East, and then Latin America,” she added. “Europe is quite crowded but we recently found a very important partner in Germany and France, which is going to be a big trend.”
When the business was starting HSBC AM was only able to cover wholesale clients, but has been covering more institutions over the last year, especially in Asia. Approximately 38% to 40% of assets under management are now from pension funds and insurance companies according to de Tapia.
Career
De Tapia has been working in financial services since 2001 but she studied ballet at the Royal Opera House in Madrid until she was 17 years old. However, when she went to university it was not possible to dance four or five hours every day, and she became in interested in finance, which was her brother’s major. At the start of her career de Tapia had accounting jobs, which she found boring and did not enjoy.
After completing an MBA, de Tapia went to a job fair in Paris and started marketing for an asset manager, which she really enjoyed. She then moved into sales, which she loved, as it still involved talking with clients. Her advice to women is to reassure themselves that they belong in finance.
“Imposter syndrome is very common and happened to me at the beginning as well,” said de Tapia. “Firms also need to hire to encourage a diverse culture, and make sure that women do not end up doing ‘invisible’ office housework.”
In addition, she would tell women not to put their life on hold, and to have children if that is what they want. De Tapia indeed: “I stopped for seven or eight months and then went back, and my career wasn’t impacted at all.”
De Tapia credits her success to being very persistent and taking ownership. Her manager has said many times that she is very empathetic, which she said is needed for success in sales. She argued that the old sales style does not work, especially now on Zoom, where clients get distracted so easily. In order to get clients’ attention, it is necessary for them to participate.
“There is nothing I hate more than the concept of pitching to clients,” said de Tapia. “I start my meetings by asking about them what are their needs, what is missing, how I can help them and listening ”
©Markets Media Europe 2023
