Bryon Lake has had more than 15 years’ experience in the ETF industry. Starting off in a hedge fund, he landed a job at what was then a very small company called PowerShares – before it was bought by Invesco – and worked his way up at the firm. After launching the ETF business in London, he moved to JP Morgan Asset Management, which has a global ETF range of more than 45 products and over $20 billion in assets.
Bryon talked about his beginnings in a start-up – including stuffing envelopes at the weekend – and how that experience taught him the importance of cultivating the right team and workplace culture for success.
Can you tell us a little about how you got into the industry?
Bryon Lake: I had the really good fortune of finding myself across the table from Bruce Bond, the original founder of the PowerShares business, as well as Ben Fulton, who ran it globally for the better part of a decade, through some friends in the Chicago area. Within about 30 seconds of the conversation we realised we were all alumni of the same school. I spoke with them and not long after I was working for them. And at this point, almost 15 years ago, the whole ETF industry was less than $100 billion. PowerShares had maybe a handful of products, with around $100 to $200 million AUM, but it was extremely early days for the entire industry. From my point of view, I was so fortunate to be part of a super innovative start-up in a growing industry.
Was it really a start up and if so, what was that like?
BL: It was a very small office – we were rammed next to each other. I sat next to Bruce and Ben and listened to their day to day conversations about running the business. It was the kind of place where we were stuffing envelopes at the weekend and emptying our own garbage cans. For sales, we looked through magazines to identify people who had even used the word ‘ETF’. All of our materials would get sent to the office in these big boxes, and we would have to put the phones down and pick the boxes out of the truck, stack them in the closet, and lay them out in an assembly line. We had hundreds of these boxes delivered, and it took hours, just five or six of us, carrying them through. We had a running joke with the head of marketing that he would disappear whenever he knew we were getting a delivery.
In many ways back then I got a taste for building things. We were building PowerShares as an entrepreneurial start-up. I moved to London to build that business here. Two and a half years ago it was the same thing at JP Morgan, starting from scratch. I was told, ‘Here’s a computer, go figure it out’. But by that point I’d had the good fortune of being involved in the initial build-out of certain areas of the ETF industry.
Do you miss anything about those slightly haphazard start-up days?
BL: The boundaries for our industry and the potential for creativity, in terms of what hadn’t been done, were vast. There were huge chunks of space that hadn’t been developed – it was more about how brand new and vast that space was. Investors loved it, but the platforms we were working with had no guidelines how to evaluate ETFs or do due diligence on them. So much of what was done in the industry – the biotech funds, the international dividends funds – those were all firsts.
But what we’re doing now is more similar than different in a lot of respects. We’re still hungry and scrappy, but we are operating in the broader context of a large organisation with resources.
Q: Since you started out, what has surprised you in a negative and positive way about the ETF industry?
BL: I’m very bullish on the market and am always amazed by how much more education needs to happen. I’m always looking for opportunities to educate those outside the ETF bubble to tell them how it’s evolving and changing.
In many ways it’s hard to hold two juxtaposing thoughts at the same time: there are almost $6 trillion assets globally, but you could see how it could grow to $30 trillion. It’s huge and yet it could be much bigger. A lot of that could be down to education and helping clients with their portfolios.
I’m always surprised by how positive the ETF community is, and by the genuine interaction you can have and how much collaboration happens within the industry. We’ve only begun to scratch the surface in terms of the innovation that can happen through the ETF wrapper over the next decade. I’m always encouraged by that and am encouraged by how the industry continues to put investors first.
How do you ensure that you don’t get comfortable in this industry and therefore halt your own career growth?
BL: I think people approach this industry with the mindset of personal growth, of creative ideas and improving investment outcomes. We go home every day with more things on our to do list than when we started. We’re obsessed with thinking everything through in the right way, whether in marketing, distribution, capital markets – there are so many facets and so much opportunity for us to improve, evolve and innovate around – so that is not an issue with our team. The issue is trying to find balance and having room to breathe. There’s not an ounce of complacency here. We have such big aspirations for the business that it just [being comfortable] doesn’t happen.
What lessons did you learn and bring over into your new role at JP Morgan?
BL: At JP the first lesson was building out the right team: making sure we had the right level of expertise. Because JPM is such a big place they had to be part of our team but also fit that culture into the broader context. There are certain approaches that work and some that don’t. We placed great effort into getting the team and culture right.
Then we made sure we had a sound platform and foundation for the business from an operational standpoint, and that we had really compelling products that added to the overall conversation. We didn’t want “me too” product. And finally, we needed to make sure we had a compelling proposition in our sales strategy and take those products to market in an exciting and compelling way. We did it in that order and that was intentional.
Has the advice you give to newcomers been consistent or evolved over time?
BL: There are some things that stay consistent. We have a joke around here that the hard work is the work. There’s no difference between fun work and hard work if you’re doing it the right way. So, making sure we take ownership of our work and are responsible for what we’re delivering, rather than just paper pushing.
Then I’ve found that as I have broader conversations, you start to understand people’s strengths and weaknesses – there’s an element of understanding where they’re coming from and putting yourself in their shoes, coaching and directing them towards success and what they’re trying to accomplish.
What are your goals, both personally and for your company over the next few years?
BL: We want to build a really big cool ETF business. We think that, based on our team and our organisation, that we have some really dynamic and game-changing things that we can bring to investors and therefore the industry. We think the industry continues to grow at a rapid pace and the innovative things we’re doing on the product, capital market, distribution and marketing side will have a huge impact on what the industry will look like and how investors use ETFs in five to ten years’ time. For example, on the product side, we think fixed income is going to be a very interesting space and active management will play a big part in that. I think we will look back in 10 years and say, ‘Wow, JP Morgan built a really compelling proposition in the active fixed income space.’