Lucy Baldwin is one of Forbes' 30 Under 30 in Finance

22 April 2015 view all posts

I met Lucy Baldwin at the Birmingham Financial Forum, where she delivered a speech on long-term investing and the future of the European corporate sector. Talking to her after the event, I found her approachable manner, accomplished personality and the fact that she achieved enormous success at such a young age inspirational. What I'll take from our conversation is to make sure I pursue my  goals fiercely and enjoy myself along the road. I hope that you find her story interesting and her advice useful.


Tell us a bit more about your story and what attracted you to finance?

When I was at University my dissertation was on leveraged buyouts, so I read “Barbarians at the Gate” and thought that investment banking would be an exciting and fast paced career with a steep learning curve. I also thought that the basic skills of being able to value a business/financial asset appropriately would set me up for whatever I may want to do later.

How did you enter the industry and excel so quickly?

I was lucky enough to start on Cazenove’s graduate scheme which enabled me to rotate around the bank and spend time with banking & ECM, research, sales & trading, asset management and also compliance. It helped build a clear picture as to how an investment bank fits together and also allowed me to make an informed decision at the end as to where I wanted to work.

What does your typical day at work look like?

In research we tend to start work just before 7am, so I grab a caramel soya latte from Starbucks on my way in from the tube. For most research analysts in our division “rush hour” is between 7am and 8am as companies put out results and new research is typically published over-night. Between 7am and when the market opens and trading starts, our sales people and clients are keen to understand what matters most out of what is new and what is going to be happening to stocks at the open. Publishing research in order to help clients understand what is already priced in, and what is not, is one of the key parts of the job for a research analyst.

Most work days for our analysts will be split between two things - (1) actually doing new in-depth, differentiated research and (2) marketing research that has already been published with our clients (who are institutional clients, pension funds, insurance companies, hedge funds etc). The equity analysts are looking for stocks that are valued too cheaply for the growth and returns profile they believe they have and of course vice-versa.

We have clients all around the world that invest in and trade single stock equities, so our analysts frequently travel to meet with them. The analysts also spend time meeting with the companies to better understand their strategies and various businesses.

Is there a column at a newspaper or a magazine that you read?

I read a lot of Goldman’s own publications in the morning from our analysts, economists and sales people as well as the Financial Times and Times (online).

What is a more notable mistake you have made? How did you deal with it and what did you learn from it?

I try not to view too many decisions as mistakes as in reality we all try and make the best decisions from the information we have at the time. In both life and equity investing, the information we have is often imperfect and so in any situation I try and make sure I have as much information as possible to help make the best decision.

You could argue I have taken a reasonable amount of career risk by changing roles a number of times in the last decade and, in many cases, leaving a job I loved to pursue a new challenge and learn new skills. I think in many cases “not taking a risk” turns out to be a far greater risk than diving in and taking it!

You are a Managing Director of research on the European Research Management team and you also serve on the Investment Review Committee. What is your approach towards the analysis of a trade idea?

The investment review committee serves multiple functions. As a director of research, part of the role is to challenge the analysts' way of thinking – e.g. helping the analysts test growth and returns assumptions – as an example, we are testing what gives a company genuine advantage vs its peers - be that the ability to sell more units of the product, sell them at a higher price, for a lower cost or using less capital. We are questioning what the forecasts imply about the market size, for example three years out, the market share implied now and in the future, we question if the margin is sustainable etc.

We can also provide guidance (act as a sounding board) when analysts are working out the appropriate way to value a particular asset (e.g. as a multiple of earnings, cash flow or revenues). 

Compared to stock-specific analysis, how do you approach industry / sector analysis?

It’s a big part of what the teams do and clients find it valuable. We encourage analysts to build forecasts of profit and revenue pools for the industries they cover where that is helpful to individual company analysis and much of this is done on a top down basis and then cross checked with the bottom up – e.g. our luxury goods analyst may take the size of the market today and work out how many customers that is based on now, average spend per head and make assumptions about those variables going forward and then cross check that with the revenue forecasts of the big players in that market.

What do you think are Europe’s main shortcomings and overall strengths? How will they affect the continent’s economic growth revival and what is the path forward?

We have written a report called “European Crossroads: taking the pulse of corporate Europe” which we published in November. We spoke to 30+ CEO’s of European companies and asked them how they saw the future for Europe and the best path forward. In summary, they believe the major challenges to be structural weaknesses such as demographics, high energy costs vs US (the interviews were conducted in the summer of 2014 when the oil price was higher and the US had a shale advantage!), poor labour flexibility, low levels of innovation, slow policy making and poor access to capital for SMEs.

Despite the challenges, Europe retains many advantages in the size and wealth of its markets, the quality of its products and institutions and its culture, heritage and education. Corporates are in good health and are cash rich. Europe now appears at a crossroads with a choice between a path of eroding long term competitiveness or one where it leverages its strengths to survive.

The path forward? Well, the CEO’s we met felt a co-ordinated response was needed – ideas included speeding up and co-ordinating policy making, improving the labour market flexibility, creating a climate for innovation, increasing incentives for R&D and creating a balanced energy policy for Europe. There is clearly no easy answer though!

What is the best trade idea you have ever had?

All investors and traders are different in the approach they have to markets. For me, I enjoy looking at secular themes in different industries, profit pools and revenues pools that are shrinking or growing, and trying to work out if it is unidentified/unknown by the majority/consensus (either in magnitude or timing). Some of the most interesting analysis I have been involved with has been along these lines – for example, as a retail analyst in 2007/8, understanding that consumer-electronics retailers were going to see profits and returns fall more drastically than consensus expected was a view  that helped clients make money. On the opposite side in Luxury goods (in 2009/2010), identifying the magnitude (and timing) of the impact of the growth in the middle class in China would have on the profit pool of the Luxury goods market was another secular theme that resulted in a positive view on European listed luxury goods stocks.

Is it hard to work in what is considered to be a predominantly male industry?

I have worked in the industry for more than a decade and I believe it’s a great industry for men and women and for people with all sorts of different backgrounds academically. I think to be successful in any business you need EQ (emotional intelligence) as well as IQ and a mix of both technical skills and the softer skills. Certainly at a graduate level our intake here is well balanced at around 50/50 females/males. The challenge the industry has is reducing the female attrition at more senior levels. 

5 things you don’t leave home without:

iPhone, wallet, sunglasses (ever hopeful), tube pass, picture of my son Ben.

What inspires you?

People inspire me – especially those that have overcome adversity or really challenged themselves – creating the possible from the seemingly impossible. Being able to work with people that are real “game changers” in life is a very fulfilling thing to do and I feel lucky that I have been able to work with many.

What is your favourite book?

I have just read Plutocrats & Richistan and thought they were both fascinating.

Favourite quote?

"Life is what you make it." c/o my Dad.

How do you see yourself in 10 years?

I would hope to be happy, healthy and doing a job I love!

What is your advice for our readers?

Find a job that excites you and that you will love – it won’t seem like work then and you are far more likely to excel at it! Learn as much as you can about the different opportunities and interrogate yourself about what your skills really are and what you really enjoy.

Goldman Sachs values top talent. What does the firm consider that to be and how do you look for it?

The firm aims to recognise top talent in all its various forms but there is no doubt we look for exceptional communication skills, the ability to be a genuine team player and for innovative people that are able to find creative solutions for complex problems for our clients. So, by definition we are seeking those people that are able to think outside the box, forecast change and react well to change in a globalising, technology driven world. We are always seeking diversity of thought across all our divisions as we believe that will help us come up with the most effective solutions and so candidates that are able to demonstrate that should be well placed.

When growing up, you wanted to become:

A vet.


Interviewers: Stelian Nenkov, Georgi Stanoev, Angel Simbaev



Lucy Baldwin

Job title: Goldman Sachs Managing Director of European Equity Research
Age: 30
Nationality: British
Degree: BSc Economics
University: University of Birmingham
Location: London, UK
Date: Jan / Feb 2015

Lucy Baldwin

Job title: Goldman Sachs Managing Director of European Equity Research
Age: 30
Nationality: British
Degree: BSc Economics
University: University of Birmingham
Location: London, UK
Date: Jan / Feb 2015