GNB GA – Change, Challenge, and Reward: Portuguese Firm takes Teamwork to a Whole New Level

GNB GA, part of Novo Banco Group, is a leading asset manager in Portugal. The firm was born in 1992 and operates domestically, as well as in Spain and Luxembourg.

Fund manager João Zorro has been leading Portugal’s GNB Gestão de Ativos (GNB GA) fixed income team since 2001 — and it’s been quite a ride.

In the intervening 20 years, the team has won acclaim, recognition and trust. “Creating value to our clients is the most important thing,” Zorro says. “Awards are, in part, the recognition that we are achieving our goal.”

And with some 50 awards under the GNB GA belt — recognising the funds managed, the managers, and the team — things are being done correctly. And consistently.

“We take advantage of our flexibility,” Zorro says. “All managers are encouraged to think for themselves. To be bold. To build strong convictions.” Procedures are constructed for the swift implementation of any changes in strategy. “The proximity between managers and the CIO, João Pina Pereira, is also beneficial,” he adds.

The fixed income team has an average of two decades of experience in asset management. “We have a good mix of people who have worked in other asset management firms, including myself and my fellow senior fund managers.

“Vasco Teles and I had specific expertise in other asset classes, as did Paulo Joaquim and Hugo Custódio. Others had experience working abroad, like Manuel Aguiar. So, the whole is more than the sum of the parts.

“The markets are always changing and so we are always learning. New economic, social, or demographic trends can emerge at any time. The market evolves and new approaches, new segments, develop.”

At the beginning of the 21^st Century, the more traditional fixed income segments — such as government bonds, investment grade corporate credit and some high yield credit — were the segments in focus. “But structured products started to emerge, and with that came an opportunity to learn, specifically in quantitative analysis,” says Zorro.

“We have been able to align our efforts with our goal: offering new added-value products. We partnered with a couple of the big European players and successfully launched a couple of Collateralised Debt Obligation (CDOs).”

Challenges come and challenges go. The financial crisis of 2008 was a major one — but again, new opportunities emerged, namely in the high yield space. “More recently, we gained expertise in the subordinated debt segment, mostly related to the financial sector.

“Markets always move forward, adapting to the new environment, to the impact of different players, including governments, central banks, institutional players, and private clients.

“The investing style has always been supported by a practical and experimental mindset that resulted in searching for opportunities and innovative applications in the fixed income assets.”

Zorro is a realist, and accepts that more challenges will lie ahead. “We are particularly excited about ESG. All the main authorities in Europe are taking this issue seriously. And we are developing our skills accordingly. Embracing sustainability for us is adding ESG’s criteria into our asset allocation decision-making process. We are adopting new investment methodologies and products. And adding new ones. It’s an on-going process, and we want to be at the forefront.”

Since João Zorro joined the company, a dozen university graduates joined the team. The team creates a suitable environment for learning and the development of skills. “I like to train newcomers,” he says. “It’s rewarding to see them grow, to become more independent, and to have a successful career.”

Some of them moved on within the company, others have landed senior roles in other asset managers — or other industries. “Fresh blood” is always welcome, Zorro says. “Newcomers have a positive impact on the rest of the team as they bring curiosity and new ideas, which make all of us reflect and grow. We are always excited when new people join the team”

The main goals, in terms of the team’s development, retain fluidity. “We now manage also multi assets and equity products. Also, there now a new set of quantitative approaches, including machine learning, which we are looking to integrate in our workflows for detecting ‘red flags’ and finding relative value.”

The integration of the equity team has brought huge benefits. “We are now more capable of looking at a broader universe of markets, issuers, themes, and events. This all adds up.

“A challenge is an opportunity to learn and to share knowledge amongst ourselves, and with the other teams in the investment department. The client guides us. But we want to grow. We are part of a group that wants to make a difference in people’s lives.”