“Don’t be afraid to involve yourself in as much as you can”

Tuesday 4 July 2023

Author: Maha Khan Phillips

Meet  Shakil Shah, CFA, Head of European Securitisations at Payden & Rygel.

When the Global Financial Crisis (GFC) began in 2007, Shakil Shah, CFA, was studying Economics at the University of Bath. It was an eye-opening experience. The investment industry felt like it was quite an elite enterprise, one which included many intelligent people, but where morals and ethics needed to be reassessed, he says.

But the GFC meant it was also an interesting time to enter the profession. While he was studying, Shah spent a placement year working in the London office of Payden & Rygel, the global investment firm. “I wanted to explore the idea of investing, and also to see how fixed income worked. My economics degree really focused on equity, and the fixed income side was limited to simple duration and bonds, so I wanted to learn more,” he says.

Back then, there were only 15 people in the Payden & Rygel London office, and Shah worked a cross a range of areas, from reporting to strategy and client management. After graduating from university, he returned to the firm, and has been there ever since. 

Over the last 15 years the London team has grown to 35 plus strong. Shah has held a variety of roles during his tenure. He has been a member of the global strategy team responsible for the development and maintenance of multi-currency fixed income portfolios, a member of the rates strategy team, and responsible for trading developed market rates. He is now responsible for monitoring credit and structural considerations in the global asset-backed and collateralised loan obligation (CLO) market, as well as making relative value and total return recommendations in those sectors. 

Shah says that working in a smaller team enabled him to build a breadth of knowledge and expertise across the entire business.

“I was exposed to almost every area you can think of, and having some understanding of the operational side of things really helped. I’ve also really enjoyed my relationship with clients. Ultimately it’s not our money, we are fiduciaries, and it is important to speak to people about what they want,” he says.

The CFA Program

Shah enjoyed studying the CFA Program. “I think of it as if I were an accountant or solicitor, you have to do your professional qualifications, and hone your skills. There’s a very important ethical component [to the Program] that you wouldn’t focus on if you didn’t do the CFA. Clearly that’s very important for our industry. I’m focused on fixed income but the Program gave me a breadth of knowledge across other areas that I wouldn’t have had time to focus on. It was intense and hard work but it was great. I think it’s something that everyone coming into the industry should do. It is certainly a professional qualification that holds you in good stead when you’re talking to clients,” he says.

For new entrants to the investment profession, he has some advice. “Don’t be afraid to involve yourself in as much as you can across different areas of your business. I also think patience is very important. When we’re young we think we know everything and should be given more experience, but it took at least five years for me to feel confident to be able to provide investors with a clear understanding of the market. Young people can be hasty, looking for career progression every year or two years, but you have to give it time.”

European Market

Shah has been responsible for the firm’s European securitisations efforts for approximately two years. “I was asked if I was interested in taking on and developing this on the European side. I was interested, I felt I had done work from a top down perspective but not from a bottom up perspective.”

He says that regulation around the sector is a lot better. “Issuers are under more scrutiny so there needs to be a higher level of collateral to qualify. A BBB-rated European CLO tranche prior to the crisis would be BB-rated at best today, so that’s a real improvement in quality.”

He also believes that there will be challenges to underlying collateral over the next six to nine months, “but it’s all starting off at a much better place and we’re not expecting to see the level of defaults that we have seen in the past. The average will be lower. Having said that, we think the recovery value will be lower as well.”

When Shah isn’t focused on all things securitisations, he enjoys cooking, and lending a hand to his friends who need investment support. He also loves to ski, and plays football with his friends once a week. “We’re not as fit as we once were, we can’t compete with the twenty-two year olds anymore,” he laughs.

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