Carrie Benz, Global Investments COO at Janus Henderson Investors tells Best Execution why her job is all about connection and communication, why extraordinary people are crucial to innovation, and how her new automation project is already improving alpha generation.
In November 2022, Benz accepted a new role as investment management chief operating officer, with a global remit. The promotion came after new CEO Ali Dibadj, who had joined himself around 18 months earlier, made the decision that he wanted a structure where the asset class heads focused on managing money, security selection and risk management, as well as raising assets. That meant that a new role was needed to manage the teams who work in support of the PMs – bringing together front office controls and governance, fixed income and equity trading, research management, strategic investment banking partnerships and investments business management under one umbrella. “He asked me if I was interested in that, and of course I said yes.”
Benz is now responsible for all of the above, liaising with key stakeholders to create and implement strategic business plans, support the delivery of strategic initiatives, drive efficiency and process improvement. It’s a big change – and a big role.
“Our mission as a collective, globally, is to support our investment teams and their ability to generate alpha,” she explains. “Then we also have a focus, from a shareholder perspective, to drive profitability, operational scale, and management of risks. It’s a balance of all those activities, executing both for our clients and our shareholders.”
Best execution: playing in concert
The firm has capabilities globally across all asset classes, trading in listed securities, bond issuance and derivatives. “We have a very talented, very long-tenured capable team that is carrying out best execution,” explains Benz. “When we think about how this works together in the larger framework, it’s a natural extension to think how they help generate alpha and how they help mitigate risk for the firm as part of trade execution. ”
“As part of the broader Investment COO org, we have parties playing a role with strategic investment banking, and pulling together all the components, the totality of the relationships that we have with the sell side and various counterparts – both access to management and research, as well as extended services that we might offer – capital funding, for example – if we’re launching a new product.
“They look at the totality of the relationship, and execution is a very important part of that, but it’s just one element. We look at whether we have sufficient coverage, and breadth and depth, from an executing partner, but we also look at how concentration of relationships can help us get to a position where we are able to extract more value for our clients through market competitive rates.
“When we think about what tools and technology we need, and how the trading teams are supported to be able to deliver best execution for our clients, that team is there to help drive and orchestrate these questions. Do we have the right technology in place? Do we have the right processes to yield the desired results? And are we connected correctly, making sure that we are able to execute and scale as simply as possible, now that these new regulatory changes are coming to bear?
“We need to think about all these different elements, and how they play together in concert.”
A unique outlook
Benz has a background in special projects – from creating human capital and succession plans to building out technology stack – and this has helped her both in terms of focus and experience.
“I like to think in investment lifecycle terms, because an investor has obligations not only for security selection, portfolio construction, managing risk and performance returns, but also raising assets. So they think about the entire continuum. It all exists in concentric circles, and they need to be able to satisfy all of these in order to be fully and optimally effective.”
One experience that really brought that to bear was building the firm’s best-in-breed research management platform, Quantum One. This is used across both equity and fixed income teams, but there is also interplay between them because the trade blotter shows historical trades, bringing together an intersection of the firm’s proprietary fundamental research, joined with a portfolio risk and attribution lens.
“We’re constantly looking at where there is opportunity to capture upside,” says Benz. “We look at bringing together all of these components to take us from being information rich to insight rich. The platform provides a central place for investors to express investment insights globally. At an aggregate level, we can track performance of analyst recommendations, the impact that had on the portfolios and determine if we fully capitalised on the investment insights. Some of those types of projects and initiatives have really driven me forward in lifecycle terms, and this is also now how I think about bringing together the team to hit their objectives.”
From the ground up
She might be at the top of her game now, but it’s been a long journey getting here. Benz has spent almost all her career at Janus Henderson, joining Janus Capital in 2000 to answer direct retail investor calls. That was the start of a two-decade journey – a journey in which, Benz jokes, she has never actually applied for another job.
“I started on the phones, but after about nine months I was tapped on the shoulder and swept off somewhere else. It’s a very entrepreneurial culture. If you can find ways to add value to our clients and to our shareholders, it’s pretty limitless in terms of the ability to create influence and exposure.”
In less than a year, Benz had moved over to the distribution side, managing senior executive relationships within the insurance space and starting to work on the analytical side – assessing data, exploring its impact.
But then she was tapped on the shoulder again as the firm restructured its distribution team – moving from working with just the big banks and insurance firms to expand into all the independent advisors globally. “So then they needed someone who knew all the systems, the data and the process to build all of the structure – both in terms of designing incentivisation and compensation plans and then creating a process and systems around reporting and engagement from a client relationship database standpoint.” Her small team transitioned and drove an entirely new distribution model for the firm – but after a few years, it was once again time to move on…
This time though, she turned the tap down. “I had an abundance of opportunity on the distribution side and I was really enjoying my job. But unbeknownst to me, the head of distribution actually put me forward for a role as CIO chief of staff, so it was all orchestrated. And someone basically made me aware that I should really take that call, because they don’t call everyone every day. So I moved into working for the heads of investment for equity and fixed income: encompassing everything from P&L to succession planning to compensation to human capital projects, launching technology initiatives, and helping CIOs to support the investment team and the responsibilities that they carry.”
By 2007 she was working as investment chief of staff for the firm, helping to manage the actual business of investment, a role she carried for 10 years before moving up to be global head of investment services in 2017 and subsequently, in November 2022, promoted to her current position.
Building business
Now that Benz has taken on this new role, she has big ambitions about what she wants to do with it. “In order to be successful, I think you always need a defined destination or at least a direction of travel. One of the things that we’ve improved upon over the years is setting multi-year business plans.
“And then from those business plans we need to link and join up the activity across the firm: whether it’s inorganic opportunities; acquisition targets that we’re seeking; what products we’re looking to launch, consolidate or extend to new markets; what our focus is from a distribution perspective; what can help inform the project portfolio, and so on. We often don’t have a lot of maturity in linking all those activities independently. We’re really good at doing a SWOT analysis and understanding the business case and what the deliverables are in measuring them, but we don’t link them all together.”
However, this is something that CEO, Ali Dibadj, is keen to change. “We’ve got scorecards, we’ve got growth strategies that have been explicitly outlined in our earnings calls, and I think they are very well-articulated,” explains Benz. “I think this is hugely important to successful execution.
A new role for a new era
“Right now we all have an abundance of opportunity but a scarcity of mindshare and resource, so our ability to focus on driving to a higher degree of success is crucial. And a key component to that is creating business managers.”
The firm recently created a whole new category of business manager positions, one for each asset class head. “We’re really excited about those new hires, we think that they will help diversify our ideas and secondarily also help us to scale up. So even though they get pulled in many different directions, the asset class heads have a right-hand person and they’re building all those business plans that we need to start delivering against.”
Breaking down barriers
The second thing that Benz wants to achieve in her new role is straightforward and simple. “I want to create connection. I see so many opportunities and I speak to so many people on my travels, and I want to be able to shrink the world and increase our neural network to identify opportunities.”
This goes back to her concept of the full investment lifecycle, which she believes must apply to and across the whole team. “You’ve got the idea, and then you put the capital to work, and you aim to get market share in that strategy relative to our competitors. It should be a full and continuous circle – and what’s increasingly important is making sure that people know how they fit into that and how they can contribute to that bigger outcome.”
Scaling up
Going back to basics, the firm is also focusing hard on the nuts and bolts of best execution – with some exciting new projects on the line. The firm’s global trading teams have been working together on the concept of auto-routing and auto-scaling.
“From an innovation standpoint, where you’ve got highly liquid and deep markets, in more normalised markets outside of protracted periods of volatility, we are starting to do some auto routing,” confirms Benz. “We feel that there are certain use cases where the angle isn’t going to add incremental value in getting an arrival price, and that frees up the team to work on much more complicated trades and trading strategy, which is valuable.”
The second element of innovation, from a fixed income perspective, is a homegrown system that the firm recently kicked off in the UK.
“Because discovery is most concentrated in the corporate bond space, we’re looking at creating a mass aggregation of arrival prices. Right now we’ve got lack of transparency which means that price discovery is really hard. So how do you systematise that? We’re finding some early wins with respect to gathering that data, aggregating that data and applying some intelligence to that data. And we’re actually starting to see portfolio managers act on it, which is driving both best execution as well as automation.
“Both these projects are in pilot phase, but we’re seeing success in terms of supporting alpha generation. We’ll be looking to scale these apps up to have a much broader global effect.”
Lessons learned
So what has Benz learned over her two decades in the business – and what has been the key driver of success? The answer, for her, is simple. It’s the people.
“Really, my role has just evolved over time. I’ve seen several transitions from a leadership perspective as the merger took place and our new CEO joined, but I’ve always worked on very cross-functional projects and this firm is entrepreneurial. I think everyone who works here would tell you that this is what makes it so special. The people here are so extraordinary and they have such a depth and breadth of knowledge. I cannot stress this enough.
“How does somebody with my background achieve this position and this opportunity? It’s because of the generosity of the people here, who have incredibly deep subject matter expertise and are very open-minded. So if you ever have an inkling that we could be doing something better or more effectively, you can get buy-in to lay out that strategy, you can set that vision and then empower the individuals who have that expertise to be able to drive that outcome.
“That’s what makes this place so special.”
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