Investing in mental health

July 29, 2021

12:30 am

Investing in mental health and well-being for long-term, sustainable returns by John Malloy


Historically, the financial industry has fostered a culture of dedication to work at the expense of many other aspects of life. The long-established mantra that in order to be a successful financier, work must be the priority above all else, is still as prevalent today as it ever has been. While there are many areas of the industry where hard work and diligence are crucial, recent events such as the pandemic have inspired us to think more laterally. One of the key areas of focus is our particular definition of success, how we will achieve it and most importantly, the effects that mental health will have on the future and sustainability of active management and its ability to generate long-term excess returns.

As experienced active investors in Emerging and Frontier markets, the aim is to generate returns for our investors that exceed our benchmarks. It goes without saying that we continue to work tirelessly for our investors in order to generate the best returns possible. However, we have become increasingly aware that long-term success will likely be a function of the development and progress of the team and the individuals that help generate those returns. For this reason, we are building a culture focused on taking care of ourselves, our personal lives and the general health and well-being of the whole team. We believe that it is no coincidence that during 2020, the year in which we invested most in mental health and well-being, our Emerging and Frontier Market Equity Funds produced returns that far exceeded their benchmarks. While past performance is no guide to the future, we think that the foundations that we have established will continue to allow the team to thrive both individually and collectively.

Our investment in the infrastructure surrounding mental resilience started prior to the pandemic. Our team members were receiving personalised stress management and resilience programs created by Molly Birkholm, who has spent a decade and a half working with people in high performance environments including US Special Operations, C-suite executives, actors and many other professionals. These programs encompass many forms of mindfulness training, such as breathing, emotional regulation, effective communication and team-building strategies. When the Covid-19 pandemic hit, we increased our investment in personal and group sessions, in order to help the team adjust to new circumstances in addition to coping with the inevitable pressures and effects of lockdown.

We also employed an investing and trading psychology coach, Denise Shull, who helped us understand the ways in which our emotions influence our investment decisions. She helped us comprehend the specific emotions that affect behavioural biases and the power of developing a simple spectrum to help us gauge and better appreciate our emotional responses. Furthermore, considering the dominance of video conferencing, we hired a presentation coach, Ed West, to strengthen the team’s presentation skills and improve overall levels of communication. Additionally, we continue to employ high-level policy advisors, such as Rice, Hadley, Gates & Manuel LLC, to help us navigate the constantly changing geopolitical environment.

Our investment in these areas is ongoing and we truly believe that our well-rounded efforts will reap rewards over the coming years opening up awareness, interest and passion while building a broader understanding and depth. We are in a very fortunate position compared to many other teams in the financial industry who perhaps are not lucky enough to have our levels of flexibility and capital. However, we would like to share some important conclusions which can hopefully be implemented, regardless of budget or stature:

Balance creates success in all aspects of life:
Through our sessions, we understand that life is a function of balancing many pillars, all of which are important. This statement may seem obvious, but on reflection, it is abundantly clear that many financial careers are knowingly imbalanced. Some are imbalanced in the hope that financial success will lead to some future equilibrium while others are imbalanced because their compensation structure is dependent upon ostensible levels of dedication (‘facetime’ is a common and disreputable adage). From work, personal finances, exercise and family to religion, love and food, all these pillars influence our mental health and affect our daily thoughts and emotions which, in turn, influence our work performance. A life which promotes balance will likely lead to more composed, consistent and thorough decision-making, which is a vital ingredient for our definition of success.


People should live in communities rather than be used as commodities:
We want our team to feel like a community where we can be focused at the same time as building long-lasting relationships. In our view human interaction and connection is of paramount importance. We intentionally built our US Headquarters in Miami in order to foster this kind of environment. Our office is in a renovated airport hangar on Biscayne Bay in Coconut Grove with adjacent cafes, parks, shops, and marinas. Our offices in London and Singapore possess similar characteristics. However, as we return to the office, we are concentrating on healthy re-integration while appreciating that many aspects of lockdown, such as videoconferencing, remain important aspects of working life.

A flat organisation creates an unparalleled opportunity for growth and innovation:
We have attempted to build a team which minimises hierarchy, in order to maximise the potential for our best investment ideas. We want differing levels of experience to be an opportunity for learning and growth, rather than be used as a justification for decision making. We have recently implemented a mentorship program which will allow our team to support each other in both sharpening analytical skills in addition to focusing on other areas of life where experience and its dissemination are essential.

Mental health, wellness and mindfulness are noticeable and contagious:
As our team has embraced the importance of mental well-being in mind, body and spirit, we noticed that corporates across the world have also decided to adopt a similar stance. We realised that the human emotions and behavioural biases which govern the decision-making of key personnel are actually very similar, regardless of the sector, industry or company. This has led to an improvement in our ability to detect functional, authentic and healthy teams as well as discern environments that are dysfunctional and potentially harmful. Our view is that if corporates invest in mindfulness and mental wellness in the right way, it is an advantage and they will likely have a better chance of accomplishing their long-term objectives.

Fundamentally, it is our view that investing in the well-being of people and the innovation they bring is an essential component of long-term investment returns, not just in asset management, but in every walk of life.

No investment strategy or risk management technique can guarantee returns or eliminate risks in any market environment.

Unless otherwise stated, all opinions within this document are those of the RWC  Emerging & Frontier Markets team, as at 29th July 2021. 

The term “RWC” may include any one or more RWC branded entities including RWC Partners Limited and RWC Asset Management LLP, each of which is authorised and regulated by the UK Financial Conduct Authority and, in the case of RWC Asset Management LLP, the US Securities and Exchange Commission; RWC Asset Advisors (US) LLC, which is registered with the US Securities and Exchange Commission; and RWC Singapore (Pte) Limited, which is licensed as a Licensed Fund Management Company by the Monetary Authority of Singapore.


RWC may act as investment manager or adviser, or otherwise provide services, to more than one product pursuing a similar investment strategy or focus to the product detailed in this document. RWC seeks to minimise any conflicts of interest, and endeavours to act at all times in accordance with its legal and regulatory obligations as well as its own policies and codes of conduct.

This document is directed only at professional, institutional, wholesale or qualified investors. The services provided by RWC are available only to such persons. It is not intended for distribution to and should not be relied on by any person who would qualify as a retail or individual investor in any jurisdiction or for distribution to, or use by, any person or entity in any jurisdiction where such distribution or use would be contrary to local law or regulation.


This document has been prepared for general information purposes only and has not been delivered for registration in any jurisdiction nor has its content been reviewed or approved by any regulatory authority in any jurisdiction. The information contained herein does not constitute: (i) a binding legal agreement; (ii) legal, regulatory, tax, accounting or other advice; (iii) an offer, recommendation or solicitation to buy or sell shares in any fund, security, commodity, financial instrument or derivative linked to, or otherwise included in a portfolio managed or advised by RWC; or (iv) an offer to enter into any other transaction whatsoever (each a “Transaction”). No representations and/or warranties are made that the information contained herein is either up to date and/or accurate and is not intended to be used or relied upon by any counterparty, investor or any other third party.


RWC uses information from third party vendors, such as statistical and other data, that it believes to be reliable. However, the accuracy of this data, which may be used to calculate results or otherwise compile data that finds its way over time into RWC research data stored on its systems, is not guaranteed. If such information is not accurate, some of the conclusions reached or statements made may be adversely affected. RWC bears no responsibility for your investment research and/or investment decisions and you should consult your own lawyer, accountant, tax adviser or other professional adviser before entering into any Transaction. Any opinion expressed herein, which may be subjective in nature, may not be shared by all directors, officers, employees, or representatives of RWC and may be subject to change without notice. RWC is not liable for any decisions made or actions or inactions taken by you or others based on the contents of this document and neither RWC nor any of its directors, officers, employees, or representatives (including affiliates) accepts any liability whatsoever for any errors and/or omissions or for any direct, indirect, special, incidental, or consequential loss, damages, or expenses of any kind howsoever arising from the use of, or reliance on, any information contained herein.


Information contained in this document should not be viewed as indicative of future results. Past performance of any Transaction is not indicative of future results. The value of investments can go down as well as up. Certain assumptions and forward looking statements may have been made either for modelling purposes, to simplify the presentation and/or calculation of any projections or estimates contained herein and RWC does not represent that that any such assumptions or statements will reflect actual future events or that all assumptions have been considered or stated. Forward-looking statements are inherently uncertain, and changing factors such as those affecting the markets generally, or those affecting particular industries or issuers, may cause results to differ from those discussed. Accordingly, there can be no assurance that estimated returns or projections will be realised or that actual returns or performance results will not materially differ from those estimated herein. Some of the information contained in this document may be aggregated data of Transactions executed by RWC that has been compiled so as not to identify the underlying Transactions of any particular customer.


The information transmitted is intended only for the person or entity to which it has been given and may contain confidential and/or privileged material. In accepting receipt of the information transmitted you agree that you and/or your affiliates, partners, directors, officers and employees, as applicable, will keep all information strictly confidential. Any review, retransmission, dissemination or other use of, or taking of any action in reliance upon, this information is prohibited. The information contained herein is confidential and is intended for the exclusive use of the intended recipient(s) to which this document has been provided. Any distribution or reproduction of this document is not authorised and is prohibited without the express written consent of RWC or any of its affiliates.

Changes in rates of exchange may cause the value of such investments to fluctuate. An investor may not be able to get back the amount invested and the loss on realisation may be very high and could result in a substantial or complete loss of the investment. In addition, an investor who realises their investment in a RWC-managed fund after a short period may not realise the amount originally invested as a result of charges made on the issue and/or redemption of such investment. The value of such interests for the purposes of purchases may differ from their value for the purpose of redemptions. No representations or warranties of any kind are intended or should be inferred with respect to the economic return from, or the tax consequences of, an investment in a RWC-managed fund. Current tax levels and reliefs may change. Depending on individual circumstances, this may affect investment returns. Nothing in this document constitutes advice on the merits of buying or selling a particular investment. This document expresses no views as to the suitability or appropriateness of the fund or any other investments described herein to the individual circumstances of any recipient.


AIFMD and Distribution in the European Economic Area (“EEA”)


The Alternative Fund Managers Directive (Directive 2011/61/EU) (“AIFMD”) is a regulatory regime which came into full effect in the EEA on 22 July 2014. RWC Asset Management LLP is an Alternative Investment Fund Manager (an “AIFM”) to certain funds managed by it (each an “AIF”). The AIFM is required to make available to investors certain prescribed information prior to their investment in an AIF. The majority of the prescribed information is contained in the latest Offering Document of the AIF. The remainder of the prescribed information is contained in the relevant AIF’s annual report and accounts. All of the information is provided in accordance with the AIFMD.


In relation to each member state of the EEA (each a “Member State”), this document may only be distributed and shares in a RWC fund (“Shares”) may only be offered and placed to the extent that (a) the relevant RWC fund is permitted to be marketed to professional investors in accordance with the AIFMD (as implemented into the local law/regulation of the relevant Member State); or (b) this document may otherwise be lawfully distributed and the Shares may lawfully offered or placed in that Member State (including at the initiative of the investor).


Information Required for Distribution of Foreign Collective Investment Schemes to Qualified Investors in Switzerland


The representative and paying agent of the RWC-managed funds in Switzerland (the “Representative in Switzerland”) is Société Générale, Paris, Zurich Branch, Talacker 50,

P.O. Box 5070, CH-8021 Zurich. In respect of the units of the RWC-managed funds distributed in Switzerland, the place of performance and jurisdiction is at the registered office of the Representative in Switzerland.

In case you missed it…

The term “RWC” may include any one or more RWC branded entities including RWC Partners Limited and RWC Asset Management LLP, each of which is authorised and regulated by the UK Financial Conduct Authority and, in the case of RWC Asset Management LLP, the US Securities and Exchange Commission; RWC Asset Advisors (US) LLC, which is registered with the US Securities and Exchange Commission; and RWC Singapore (Pte) Limited, which is licensed as a Licensed Fund Management Company by the Monetary Authority of Singapore.


RWC may act as investment manager or adviser, or otherwise provide services, to more than one product pursuing a similar investment strategy or focus to the product detailed in this document. RWC seeks to minimise any conflicts of interest, and endeavours to act at all times in accordance with its legal and regulatory obligations as well as its own policies and codes of conduct.

This document is directed only at professional, institutional, wholesale or qualified investors. The services provided by RWC are available only to such persons. It is not intended for distribution to and should not be relied on by any person who would qualify as a retail or individual investor in any jurisdiction or for distribution to, or use by, any person or entity in any jurisdiction where such distribution or use would be contrary to local law or regulation.


This document has been prepared for general information purposes only and has not been delivered for registration in any jurisdiction nor has its content been reviewed or approved by any regulatory authority in any jurisdiction. The information contained herein does not constitute: (i) a binding legal agreement; (ii) legal, regulatory, tax, accounting or other advice; (iii) an offer, recommendation or solicitation to buy or sell shares in any fund, security, commodity, financial instrument or derivative linked to, or otherwise included in a portfolio managed or advised by RWC; or (iv) an offer to enter into any other transaction whatsoever (each a “Transaction”). No representations and/or warranties are made that the information contained herein is either up to date and/or accurate and is not intended to be used or relied upon by any counterparty, investor or any other third party.


RWC uses information from third party vendors, such as statistical and other data, that it believes to be reliable. However, the accuracy of this data, which may be used to calculate results or otherwise compile data that finds its way over time into RWC research data stored on its systems, is not guaranteed. If such information is not accurate, some of the conclusions reached or statements made may be adversely affected. RWC bears no responsibility for your investment research and/or investment decisions and you should consult your own lawyer, accountant, tax adviser or other professional adviser before entering into any Transaction. Any opinion expressed herein, which may be subjective in nature, may not be shared by all directors, officers, employees, or representatives of RWC and may be subject to change without notice. RWC is not liable for any decisions made or actions or inactions taken by you or others based on the contents of this document and neither RWC nor any of its directors, officers, employees, or representatives (including affiliates) accepts any liability whatsoever for any errors and/or omissions or for any direct, indirect, special, incidental, or consequential loss, damages, or expenses of any kind howsoever arising from the use of, or reliance on, any information contained herein.


Information contained in this document should not be viewed as indicative of future results. Past performance of any Transaction is not indicative of future results. The value of investments can go down as well as up. Certain assumptions and forward looking statements may have been made either for modelling purposes, to simplify the presentation and/or calculation of any projections or estimates contained herein and RWC does not represent that that any such assumptions or statements will reflect actual future events or that all assumptions have been considered or stated. Forward-looking statements are inherently uncertain, and changing factors such as those affecting the markets generally, or those affecting particular industries or issuers, may cause results to differ from those discussed. Accordingly, there can be no assurance that estimated returns or projections will be realised or that actual returns or performance results will not materially differ from those estimated herein. Some of the information contained in this document may be aggregated data of Transactions executed by RWC that has been compiled so as not to identify the underlying Transactions of any particular customer.


The information transmitted is intended only for the person or entity to which it has been given and may contain confidential and/or privileged material. In accepting receipt of the information transmitted you agree that you and/or your affiliates, partners, directors, officers and employees, as applicable, will keep all information strictly confidential. Any review, retransmission, dissemination or other use of, or taking of any action in reliance upon, this information is prohibited. The information contained herein is confidential and is intended for the exclusive use of the intended recipient(s) to which this document has been provided. Any distribution or reproduction of this document is not authorised and is prohibited without the express written consent of RWC or any of its affiliates.

Changes in rates of exchange may cause the value of such investments to fluctuate. An investor may not be able to get back the amount invested and the loss on realisation may be very high and could result in a substantial or complete loss of the investment. In addition, an investor who realises their investment in a RWC-managed fund after a short period may not realise the amount originally invested as a result of charges made on the issue and/or redemption of such investment. The value of such interests for the purposes of purchases may differ from their value for the purpose of redemptions. No representations or warranties of any kind are intended or should be inferred with respect to the economic return from, or the tax consequences of, an investment in a RWC-managed fund. Current tax levels and reliefs may change. Depending on individual circumstances, this may affect investment returns. Nothing in this document constitutes advice on the merits of buying or selling a particular investment. This document expresses no views as to the suitability or appropriateness of the fund or any other investments described herein to the individual circumstances of any recipient.


AIFMD and Distribution in the European Economic Area (“EEA”)


The Alternative Fund Managers Directive (Directive 2011/61/EU) (“AIFMD”) is a regulatory regime which came into full effect in the EEA on 22 July 2014. RWC Asset Management LLP is an Alternative Investment Fund Manager (an “AIFM”) to certain funds managed by it (each an “AIF”). The AIFM is required to make available to investors certain prescribed information prior to their investment in an AIF. The majority of the prescribed information is contained in the latest Offering Document of the AIF. The remainder of the prescribed information is contained in the relevant AIF’s annual report and accounts. All of the information is provided in accordance with the AIFMD.


In relation to each member state of the EEA (each a “Member State”), this document may only be distributed and shares in a RWC fund (“Shares”) may only be offered and placed to the extent that (a) the relevant RWC fund is permitted to be marketed to professional investors in accordance with the AIFMD (as implemented into the local law/regulation of the relevant Member State); or (b) this document may otherwise be lawfully distributed and the Shares may lawfully offered or placed in that Member State (including at the initiative of the investor).


Information Required for Distribution of Foreign Collective Investment Schemes to Qualified Investors in Switzerland


The representative and paying agent of the RWC-managed funds in Switzerland (the “Representative in Switzerland”) is Société Générale, Paris, Zurich Branch, Talacker 50,

P.O. Box 5070, CH-8021 Zurich. In respect of the units of the RWC-managed funds distributed in Switzerland, the place of performance and jurisdiction is at the registered office of the Representative in Switzerland.

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