Managing Director, Head of Index Investing, Americas @ DWS Group
Luke Oliver is an “English man in New York” – residing there for over 15 years he is almost native. Having side stepped from Deutsche Bank into the ETF business ten years ago he has been helping build the brand ever since. He is a managing director, recently made Head of Index Investing for the Americas in DWS Group.
“On the sell side I found myself half-way up a ladder that I didn’t want to climb, so when I saw the opportunity to get into ETFs I jumped at it.”
Jobs in ETFs (JiE): Why did you decide to pursue a career in ETFs?
Luke Oliver (LO): I worked at Deutsche Bank in London from 1998, moving to the US in 2004. Working in the currencies and commodities side of the business at the time, my move into the ETF business in 2009 wasn’t too big of a leap, though it was still relatively early days in terms of assets and an area that was a small fledgling part of the industry. It was entrepreneurial, I was exposed to different sides of the vehicle from early on.
The business took on a new direction in 2010 when we acquired a small independent ETF shop. In 2011 we launched our first 1940 Act products, this led on to years of innovation launching some of the first currency hedged ETFs, the first China A-shares ETF, efficient high yield access and the largest equity ETF launch in the past 15 years (Xtrackers MSCI USA ESG Leaders Equity ETF) – as part of the asset manager.
JiE: Are there particular elements of culture at DWS that drew you to the business and keep you there?
LO: The incorporation into the asset management business gave me the best of both worlds. We have managed to keep the entrepreneurial elements of being a small business while leveraging the benefits of a true global asset manager including things such as distribution, marketing expertise, research and overall reach. Today the index investing team is a fully integrated part of the firm.
JiE: Are there significant work-culture differences between the UK and the US and, if so, how have you adapted to them?
LO: The firm has a global approach and culture, though in index investing, specifically ETFs there are some business differences, including the legal structure, the various international exchanges, the way people trade and the regulation. The European and the US markets are very different, however globally our culture and message is very strong.
JiE: What were some of your most important career turning points and when did you know it was the right time to make a move?
LO: The move from London to the US was big, it was an opportunity to go somewhere where I could help build a business while making a reputation for myself. It wasn’t a difficult decision.
Moving from the sell side to asset management was also significant, and not a difficult decision. On the sell side I found myself half-way up a ladder that I didn’t want to climb, so when I saw the opportunity to get into ETFs I jumped at it. Through starting a business from scratch, I got an accelerated experience to every part of the industry.
Being part of the ETF industry, and asset management in general, means I feel connected to a very tangible world within finance. We’re building tools and solutions that are being used by clients and individuals to plan for their financial futures. The ETF wrapper is particularly flexible.
JiE: What do you look for in people that you hire? What do they need to bring to the team in terms of skills or attitude?
LO: Above anything else I look for a strong work ethic and ability to add to the culture of the team. People who make themselves accountable. Often specific technical skills and experience are prerequisites, though that attitude and business culture fit are critical. It’s key to identify these characteristics which are not always easy to gauge in interviews, so I favor having candidates meet different members of the business at various levels of seniority. We put a lot of stock in what our people think. We also have an excellent graduate recruitment program and we have a great policy of promoting talent internally, moving people to help them develop.
JiE: Is there anything you expect people you’re hiring to know?
LO: ETFs are now part of the fabric of the markets, as is passive or index strategies, so it helps to have a good understanding of the markets in general. It always impresses me when people truly understand the dynamics of ETF liquidity, underlying liquidity or have an understanding of the relevance of big industry events, such as August 24 and the flash crash for example, and also have a keen eye on industry trends.
JiE: Is there something you like to ask all candidates at interviews?
LO: The main thing I always try to establish is how good they are at overcoming challenges. This can include seeing things through to the end, being a committed part of a team, being constructive. I’m keen to hear about something that failed, how it was handled. I want to hear the process and the learnings.
JiE: What has been the biggest challenge of your career and your proudest achievement?
LO: During the financial crisis, pre my ETF days, I was responsible for measuring our firms exposures to other firms, this required me to work 18-hour days for weeks and was exhausting both mentally and physically.
In 2015 when the Chinese crisis hit we had to manage our China A Shares ETF through some of the most challenging markets imaginable. We were well prepared and as such weathered the storm. Very hard work, but rewarding.
It goes without saying that the experience of having the Xtrackers ETFs take-off, after a slow start, to become, at the time, the fastest growing ETF platform, was incredible.
I believe our best moments are still ahead of us!
JiE: What is the best piece of professional advice that you’ve received?
LO: “Be prepared to fluctuate between being a specialist and a generalist to succeed”
I found this useful. Usually being the specialist is what gets recognized and leads to broader responsibilities. When this happens being a specialist can be a disadvantage and breadth might be more important than depth. However, you often then need to refocus to grow further. Another way of saying this is “keep learning, keep evolving and embrace change” – it’s happening.
JiE: What advice would you give to people starting out in the ETF industry today?
LO: As the industry has grown, ETF roles have become more specific. Previously they used to be broader as we all collectively figured out the right structures. I encourage people, and it’s certainly how I like to operate, to know your product back to front. Portfolio management, market structure, trading, distribution channels and how the business works are useful.
JiE: What is the greatest challenge on the horizon for ETFs?
LO: Cost increases versus fee compression – the cost of running ETFs in some areas are increasing, while fee compression is happening at the same time. My concern is that this makes it more difficult for innovators to disrupt.
Some firms are reducing costs on ETFs with the hope that they will make money from a peripheral business, but what happens if that peripheral area becomes disrupted itself?
We have to remember that we are stewards of a sustainable industry and we must act with that in mind.
JiE: What are you most excited about for the ETF community?
LO: There is a lot to be excited about in the industry. There is a new wave of innovation coming. We are seeing new wrappers – active and non-transparent – and new asset classes being accessed.
The new ETF rule is anticipated to be published soon and my take is that this will open up the fixed income market for ETFs further.
JiE: What is work-life balance for you and how do you achieve it?
LO: My work life balance swings back and forth. If there’s a new challenge/role/product to work on, then I like to be able to give it 100%. There is a time to go the extra mile.
However, I like to find balance and when I have time I run, hike and paddle board on the Great South Bay off Long Island. Spending time with my family is key!
Right now I’m 100% focused on the business and my new role so the ‘life’ part takes a back seat somewhat, but there’s always some time for fun. Just recently I was celebrating with colleagues after our high yield ETF hit $3bn in assets!!