Episode summary
Abigail Wattley on Learning to Underwrite Managers — Starting With the Asset Classes Nobody Wanted
Investment Management Operations
· · 7 min · Hosts: Ted Seides · Guests: Abigail Wattley, Colette Chilton
Summary
The guest describes how she learned manager selection by taking on the least popular asset classes and teaching herself the basics from scratch. After returning to the investment office in 2010, she wrote her own job description, asked to own asset classes and manage people, and ended up with investment-grade fixed income and real assets, areas she says she knew very little about at the time. To build technical fluency, she went to conferences, spent a week at a PIMCO bond boot camp, and took a course at SMU called oil and gas investing for non-petroleum engineers.
Her biggest lesson was that manager underwriting comes from experience, not theory. She says it is easier to teach what to do than what not to do, and that a long leash helped her make mistakes without blowing up the portfolio. She argues that in investing, difficulty is not the goal: if something looks clearly attractive, it is worth pursuing, and a manager repeatedly recommended by others deserves serious attention even if it is not the least-discovered idea.
She credits Colette with sharpening her diligence process. The guest would do the sourcing and short listing, while Colette met every manager before they entered the portfolio and quickly identified the key flaw, helping turn the process into a practical apprenticeship.
Key takeaways
- The guest says she built her career by taking on investment-grade fixed income and real assets, two technical areas nobody else wanted.
- She learned the basics through intensive training, including a PIMCO bond boot camp and a course called oil and gas investing for non-petroleum engineers.
- Her core belief is that you can teach people what to do, but not what not to do, without letting them make mistakes.
- She argues that investors should not chase difficulty for its own sake: “we don't get points for difficulty, we get points for making money.”
- Colette’s edge was fast, surgical diligence; the guest says she could flip to “page 47” and find the issue within five minutes.
Notable quotes
“we don't get points for difficulty. We get points for making money”
“I wanted to own asset classes. And I'll come back to what those were because that's really the answer to your question”
“I remember going to a PIMCO bond boot camp for a week. They used to run this amazing boot camp”
“you can teach people what they're supposed to do, but it's really hard to teach people what they're not supposed to do without them actually making the mistakes themselves”
“whenever you put a manager in front of her, you know, she would flip to immediately like page 47”
How the episode opens
If you look at your first couple of years and just take the the unit of researching a manager, thinking about a decision, what did you know or not know that you kind of learned in the next phase of step by step all the way through? Well, I didn't know a lot early on personally and I remember so I think I mentioned I was here for a year before I went to business school. So I came back to the investment office in 2010 and I remember sitting down with Colette.
I'd gone out to lunch with her. It was my second year of business school and I had a couple job offers and I was actually genuinely sitting down to ask her advice about which one I might take and she said,"Well, I'd really like for you to come back to the investment office. would you consider doing that?
And I said, "Yes, I'd love to. And she said, "Okay, why don't you write the job description for the job that you'd like to do and then we'll talk about it. And I remember going home and writing that job description.
And there were, I think, probably three key things that were on that job description. One was I wanted to own asset classes. And I'll come back to what those were because that's really the answer to your question.
Two is I wanted to manage people. Um, so that's hence the analyst program and three was I wanted to report to Colette cuz I knew that was going to really be my opportunity to learn a lot. But the going back to my first point around the asset classes that I wanted to manage, I think what she basically did was went to the two managing directors at the time um, one on the marketable, one on the non-marketable side and said, "Okay, which asset class do you want to give up?
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- manager selection
- fixed income
- real assets
- diligence process
- learning markets from scratch
Companies and tickers mentioned
- PIMCO
Watch the episode
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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Investment Management Operations, this episode and its artwork belong to Ted Seides – Allocator and Asset Management Expert. Octagon is not affiliated with the show; this page is an independent summary.
