So Long, Farewell, Auf Wiedersehen, Adieu.

By Jim Leaviss

As you may have already heard, I’m going to be leaving M&G later this year, after over 27 years here, most recently as the Chief Investment Officer for Fixed Income.  I’m off to do a Master’s in the History of Art, and so I’ll be back in full-time education, studying modernism in Germany between the two World Wars.  For those of you who have followed this blog over the years, you’ll know that this is a period we’ve looked at with great interest from an economic perspective, being the famous hyper-inflation years of the Weimar Republic.  For me it will now be about the Bauhaus movement, Christopher Isherwood’s Berlin (think Cabaret), Fritz Lang’s Metropolis, and the paintings of Otto Dix. 

I’ve loved my time in bond markets here at M&G, and I’d like to thank everyone I’ve worked with over the years for making it such a great place to work, and in particular Theo Zemek for hiring me in the first place.  At M&G Theo launched the UK’s very first corporate bond mutual fund, and also challenged the idea that fixed income was a boring asset class.  Hopefully over the 16 years since I started Bond Vigilantes we’ve helped to continually dispel that idea too, as we’ve written about the strains in the US mortgage market well ahead of the Global Financial Crisis, navigated through the Eurozone debt crisis, the pandemic and subsequent inflation boom, and the Trussonomics induced LDI problems.  I hope you have also enjoyed the more light-hearted blogs.  I enjoyed counting the shrinking number of monster feet in packets of Pickled Onion Monster Munch (others at nearby desks disagree) for perhaps the first commentary on the shrinkflation trend, and it was always the more esoteric academic research that interested me most – what, for example, was the impact of the dragon Smaug hoarding so much gold (the money supply) on the economy of Middle Earth in The Hobbit?  Some blogs got me into trouble, and in a way gave me a foretaste of the new online culture that has developed in recent years.  I’d suggest that you steer clear of writing about the economic impact of devolution, and especially avoid discussing a future without physical cash if you want a quiet life!

I would like to thank M&G for the entrepreneurial environment that allows us to just get on with producing the blog, without having to go through days of editing and sanitisation – the blogs genuinely come from the fund managers, analysts, dealers and specialists and reflect what they find interesting.  Their grammatical incompetence did drive me up the wall sometimes, but we don’t pay them for that, thankfully.  For me, when I consider my blog ‘highlights reel’ I would say that three come to mind.  Firstly I was the first person to write about the possibility that the world’s central banks would eventually write-off their vast Quantitative Easing period holdings of government bonds rather than selling them back into the market.  Secondly, one of our best-read blogs came out just as UK gilt yields starting spiking in the wake of the September 2022 ‘fiscal event’ that triggered issues in the LDI pension market.  And thirdly, I can’t think of many places other than M&G that would have let me film myself drive around Tokyo in a Super Mario costume talking about the Japanese economy.

Finally a word on the Fixed Income team: it continues to go from strength to strength.  Back in 1997 there were just 4 of us, in a corner of a small office in Minster Court in the City of London (a gothic building that stood in for Cruella de Vil’s house in the 101 Dalmations film).  Today we have over £130 billion of bonds under management, a team of over 40 credit analysts, and bond investment teams not just in London, but in Chicago, Singapore and Paris.  I’m sure that the team’s investment philosophy and expertise will see it continue to be incredibly successful in future and I’m looking forward to seeing how the exciting bench of talent we have here develops.  Good luck everyone, and thanks for being part of an incredible investment culture at M&G, as well as being such good human beings too!  I’d also like to say thank you to all the clients who have supported me and the team over my three decades here, as well as the journalists who have picked up on, and challenged, our ideas.  The blog, of course, carries on!

I’ll be around for a while to come, if you want to buy me an alcohol-free pint of Guinness for example, or chat about the Tour de France, Nottingham Forest, or even bond markets.  I’m going to end with my biggest passion, music, and give you the definitive list of the 5 best bands in the world ever.  Bonds, football, bikes and bands – that’s what blogs were made for. 

  1. New Order
  2. The Velvet Underground
  3. The Smiths/Morrissey
  4. LCD Soundsystem
  5. David Bowie

Love, Jim x

P.S. A couple of bonus blog.  I can’t watch this one without shuddering at the stupidity and danger.  Who built that thing?  Why did they let us do it?

And here’s our biggest budget production, a documentary about the UK’s First World War debts, filmed at the Imperial War Museum in London.

The value of investments will fluctuate, which will cause prices to fall as well as rise and you may not get back the original amount you invested. Past performance is not a guide to future performance.

Jim Leaviss

Job Title: CIO Public Fixed Income

Specialist Subjects: Macro economics and fixed interest asset allocation

Likes: Cycling, factory records, dim sum

Heroes: Brian Clough, Morrissey, Neil Armstrong

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