As we mark the decade anniversary of the collapse of Lehman Brothers, asset allocators and fund selectors remember 'the emotional impact' of the event that saw close to $10trn (£7.68trn) losses in global equity markets, fuelling the worst financial crisis in recent history, and explain how it affected them as investors.
Theodora Zemek, head of fixed income strategy at Neptune Investment Management
I was astonished it was Lehman Brothers that was the straw that broke the camel's back. Once Lehmans collapsed, everyone suddenly realised how deep the problem went - it was an absolute nightmare.
The weak links are never the ones you think are the weak links and correlations are not necessarily correlations. We have learnt common sense has a major role to play in financial markets.
When matters hit the fan, liquidity is the first thing that goes out of the window. It is much harder to work your way out of a problem as easily as you can slip your way into it.
At the system level, just because individual institutions are managing their own risks in an arguably reasonable way does not mean there is anybody looking at the risk of the system overall.
Complexity at the system level is an evil leverage and is extremely dangerous, so the lack of risk management at the system level was ultimately fatal.
James Calder, research director at City Asset Management
My first thoughts on the ten-year anniversary of Lehmans' collapse is the decade has gone by quickly and we are still investing with this overhang.
I do not believe anyone who was investing at that time will not have been affected somehow.
Are we more cautious because of it? I doubt it. What it has created is an exceptionally unusual monetary backdrop that is only now starting to be unwound.
Economic historians 100 years from now will have a better idea as to whether this monetary experiment was successful.
Those who were not managing money through the crisis or are laypeople really have no idea how close we came to the economic abyss.
I was at Barings at the time and I remember asking my boss, the late Percival Stanion, who in my view was one of the best multi-asset investors of the past 20 years, how bad things were on 15 September 2008.
He had just come back from food shopping during his lunch break. Percival picked up a can of beans, looked me in the eye and simply stated "tomorrow this is currency".
James Bateman, CIO of the Fidelity Multi-Asset Investment team
The scar of Lehman Brothers is still there and has an emotional impact on those who worked through it. I worked next to Lehmans and saw everyone leaving the office with the boxes; the human impact was incredibly shocking.
People are much more worried about tail risk now and what the worst outcome could be, so we have less irrational exuberance. For example, the FAANG stocks are far different to [the tech stocks] during the TMT bubble; there is a greater sense of cynicism now.
There has also been a cultural shock [and the recognition] that finance should do some social good, so you are seeing more governance and engagement. A well-governed company hopefully won't have the same issues as Lehmans.
It has changed the perception of everything. If you have not been working through something like that, or through a downturn, then you cannot work in finance.
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