Starting a new job normally comes with a frenzy of activity, but Isabelle Scemama’s ascension to one of highest posts in global investment coincided with a global lockdown that gave her room to slow down and think.
“It was surprising not to wake up every morning and to take the next plane or the next train,” says the 53-year-old Parisienne, who was appointed global head of alternatives at Axa Investment Managers (Axa IM) at the start of March.
“And I am privileged, so it was not challenging to stay at home. So at the beginning, it’s a little bit of rest - but quite rapidly we feel the need for social interaction and physical interaction. Zoom and Teams cannot cope with this completely.”
How quickly the world gets back to physical interaction is a key question facing Scemama as she oversees a €137bn portfolio of assets around the world, including infrastructure and real estate.
She now plays a key role at the €800bn asset management arm of French insurance firm Axa, in a job created by the division’s new executive chairman Gérald Harlin as he scrambles to boost profits following the sudden departure last October of Axa IM chief executive Andrea Rossi.
Does Axa’s assets division remain an asset?
The reshuffle at the top comes amid fresh speculation about parent Axa’s intentions for the division. The insurer batted away takeover bids for its IM arm from Natixis and BNB Paribas in 2017.
Scemama, who has been with Axa for almost 20 years, is getting on with the job.
“There is a lot to be done on alternatives and being integrated makes things easier,” she says.
“It’s a very exciting role and I am honoured to have been offered it.”
Among her early concerns is the 62-floor office skyscraper Axa has been building at 22 Bishopsgate in the heart of the City, taller than everything in London except The Shard.
Completion has been delayed due to the pandemic - and the site could even turn out to be the last of its kind given the structural change sweeping through property markets as workers stay at home.
The glass tower remains only 60pc let and is fighting for occupants at a time when many bosses - and purse-holders - have learned they can manage perfectly well without going into the office at all.
Scemama, speaking over the phone from Paris in a thick French accent, says she isn’t particularly worried, arguing the high quality of the building will see it through.
“I will not tell you that the number of visits in July and August has been at the same pace since before lockdown - of course not,” she says.
“But [we] have made good progress and signed one lease during lockdown, which is an achievement. It is exactly the kind of asset I like to have on my book at this time of the crisis.
“I feel far more confident with 22 Bishopsgate on the books than with a stock of old or average quality buildings, even well-located, because I know that tenant demand will be more impacted for these kind of assets.”
Axa IM has about €8.9bn worth of real estate assets under management around the UK.
Born and raised in the south-eastern French city of Grenoble, Scemama graduated from Paris’s elite Sciences Po in political science, before joining the corporate finance team at Paribas in 1989.
Reportedly noticed there for her “natural authority” and ability to grasp different sides of a problem, she moved to Axa in 2001 and has stayed ever since, hooked on a regular diet of challenges and promotions.
Scemama has risen to one of the most senior positions in asset management and real estate while raising three daughters. Her advice on balancing children and career is at once simple and extremely difficult.
“Find the right partner and find the right company,” she says.
“But I think, yes, it’s a lot about balance within the family. I don’t worry so much for my daughters as they have had a very good example - both from mum and dad.”
The industry has progressed since she started her career, she adds.
“There are more woman in the industry, which is good, notably in real estate which has historically been poorly managed on that front,” she says.
“The number of women is improving slowly but regularly.”
Scemama has taken on the job amid strong demand for private assets as central banks keep interest rates at historic lows to support economies as governments pump money in to try and get through coronavirus.
“We will continue to be in an environment where asset scarcity will remain and where it will be challenging to generate performance,” she says.
“It’s a market where winners take it all - and this will be even more the case following the pandemic. I don’t think any segment will generate more traction than any other. I think what will matter more is the way we are doing things.
“It’s about accessing the right deals, sticking to a strategy of conviction, generating value through asset management.”
Climate change concerns
The executive is particularly focused on environmental sustainability, an issue which has shot up investors’ agendas in the past decade amid increasingly alarming warnings about the financial risks of climate change and growing protests.
Being part of an insurance group perhaps makes Axa IM particularly alive to concerns assets could become unviable in the shift towards a lower carbon economy, as well as the risks to properties exposed to climate change.
Higher sea levels could potentially spell disaster for major cities including London - while if the threat of catastrophe is avoided, then demand for oil could collapse and the value of assets owned by the likes of BP and Shell would collapse.
Axa IM took its first major leap into renewable energy in April when it bought a 20pc stake in Acciona Energia Internacional, the Spanish owner of wind farms and solar panels in countries including the US and Australia.
“We are very well aligned with Acciona with the capacity to have a long-term view and to grow this portfolio,” says Scemama.
“I always say, don’t just ask me to buy green assets, because everybody can - ask me to make green assets.
“I think that’s where the difference is - buying the green and selling the dirty assets will never make a difference for the planet, but buying the dark and making them green will definitely make the difference.”
Axa IM had started to lean in several directions long before the pandemic, and remains keen on student accommodation despite rolling coronavirus lockdowns keeping foreign undergraduates at home.
“To be honest, we could have questioned the performance of student accommodation in a Covid environment,” says Scemama.
“But we are positively surprised by the way it performed. It really demonstrates that studying remotely will not work for these young people - they want to interact and go to university. I feel comfortable there is growing demand from students.”
The issue of Brexit
Looming over many of her decisions is a threat of a no-deal Brexit, although talks resumed last week, raising hopes of a breakthrough after months of threats and bluster.
“When it comes to politics I think its sensible not to make any prediction,” she says.
“Of course I hope they will find an agreement - it would be better for the business and for everybody if they can.”
Once again, she is keeping her head down and getting on with the job.
“I think it’s the game of politics to make things up and down and generate emotion, so we will see where we end up,” she says.
“We have no option other than sticking to our conviction and being very disciplined in the way we continue to deploy capital.
“In this uncertain environment that now we are used to, I think that’s the best thing to do.”