Robert da Silva, a fixed income specialist and new co-CIO at van Eyk Research, is about to begin a review of the fixed income sector and hints that ‘minor enhancements’ will be made in the process
After leaving school and stocking shelves at Coles for two years, Robert da Silva went back to university and sparked a 40-year love affair with economics. Leng Ohlsson* explores the career of van Eyk Research’s co-CIO and head of research, who joined the firm late last year, and his investment beliefs.
Job hopping is the norm for most workers these days. The average job tenure in Australia is four years, according to McCrindle Research, and that’s expected to fall to three years by 2020. In that respect, Robert da Silva is not normal. He’s also disarmingly humble for a portfolio manager who grew up at BT Funds Management during its heyday.
Before joining van Eyk Research as head of manager research in November 2013, da Silva spent 25 years at BT. He got his start in financial services after university at Prudential Insurance, where he worked under head of fixed income, Rick Steele. He followed Steele to Morgan Grenfell and later to BT in 1988 before transferring in 2002 to the firm’s parent at the time, Principal Global Investors. At Principal, da Silva was managing director, Asia Pacific Fixed Income responsible for a variety of large fixed income portfolios.
“I effectively stayed at BT for 25 years and I’m proud of what I achieved there,” he said. “I was one of the first people at BT to take a keen interest in credit and hybrids, and over time credit became a more substantial part of the fixed interest portfolio with a formidable investment team.”
“At Principal, I secured seed capital for the strategic income fund which was a global diversified credit strategy that grew to almost $800 million.”
As a portfolio manager, da Silva recalls many grueling reviews by research houses including van Eyk. Now the tables have turned with da Silva and his team interviewing and rating portfolio managers and analysts. Recently, van Eyk completed a review of the Australian equities sector. The results are expected to be released next month. The group is about to begin its review of the fixed income sector.
Da Silva is keen to get started on the fixed income review, hinting that “minor enhancements” will be made.
Of the Australian equities universe, he said there’s a “fair bit of dispersion” although the results of van Eyk’s latest review will confirm the quality of managers it has previously assessed as well as the vigorousness of its process.
During that review, da Silva found himself in unfamiliar territory, interrogating old associates and colleagues.
“This role has exposed me to some very interesting and intelligent people I’d never met before as well as a lot of old faces,” he said.
“It’s a challenge to review a former colleague and give them a rating but I focus on keeping work and personal history separate, and professional people understand that. They know a job needs to be done and it’s not personal. In fact it’s often an advantage when you know someone well because you know their history and the depth of their skill and expertise. I haven’t come across a conflict in this area yet and don’t see it as a material issue.”
At BT, da Silva worked beside respected equities managers including Kerr Nielsen, Rohan Hedley, Chris Selth, Paul Moore and Marcus Fanning. His first few weeks at Prudential were also spent on the equities desk before moving to the fixed interest team.
Had things been different, he could’ve been a stock picker instead of a fixed income manager living in their shadow – a position da Silva was entirely comfortable with.
“At BT, Australian equities was the flagship strategy but I was never bothered by that because I believe that fixed income is a much more interesting and technical area with greater diversity and complexity,” he said.
“Fixed income may be the less glamorous, poor cousin to equities in many investment management shops but in an insurance company, which is where I started, that was the place to be.
“I developed my bent for bonds at Prudential investing in short-term money market securities on behalf of the insurance company and it has never left me.”
At van Eyk, da Silva’s role is much broader than manager research. He’s also the group’s deputy chief investment officer, supporting van Eyk chief executive and chief investment officer Mark Thomas.
They have responsibility for the asset allocation, portfolio construction, manager selection, risk management and monitoring of the van Eyk Blueprint series of multi-manager funds with input from van Eyk’s asset consulting team.
That part of the job was a major attraction for da Silva.
“In the past I primarily bought and sold securities and managed portfolios of direct securities, and now I’m building multi-asset and multi-manager portfolios. Both jobs are interesting and rewarding, and utilise a variety skills and experience,” he said.
Da Silva said his investment beliefs are completely aligned to van Eyk. He’s a strong believer in the value of active management and he’s a disciple of behavioural economics, which he says gives active management “theoretical integrity”. At times, da Silva describes himself as “contrarian”.
“I’m a risk controlled investor both personally and professionally. Generally, fixed interest investors tend to be more defensive,” he said.
“I can be adventurous and take a position in a speculative investment but the size of that position will never be hair-raising, so if anything goes wrong it won’t break the bank. I’m happy to take calculated risks but I’m more aligned to value investing and I take a longer term view.”
Da Silva is co-CIO of van Eyk, along side Mark Thomas, who remains the firm’s largest shareholder and chief executive.
*Leng Ohlsson is a director of Collaborative Media & Publishing, which is a consultant to van Eyk Research.