Ex-City trader Peter Leahy shares insider knowledge with UEL finance students
Peter Leahy decided against going to university, and his first job was making wine – “bad wine” as he puts it, in Zimbabwe. But that did not stop him enjoying a successful 30-year career as a financial trader in the City of London.
Mr Leahy shared some of his experience and career highlights with finance students at the University of East London’s Royal Docks School of Business and Law in April.
Beginning his financial career in the UK gilts (government bonds) market, he later specialised in fixed-income markets at JP Morgan, which was then considered to be the cutting edge of innovation in financial products.
In 2010, he quit the City and founded Sovereign Leadership Group (SLG), specialising in advisory, education and training courses for financial professionals.
He said, “There’s naturally a great focus on numeracy and computer skills, and they’re important, but there’s also no substitute for getting on with people, being affable, organising oneself and developing soft skills like how to give presentations and mindfulness.”
“I think you can be a graduate of ancient Greek or medieval history, but as long as you’ve got the skills needed and are willing to deploy them, you can get on in the industry.”
The financial world is often portrayed as brash and ruthless – an idea perpetuated by TV programmes such as Dragon’s Den and films like The Wolf of Wall Street. But is the reality like that?
“It’s absolute tosh,” said Mr Leahy. “It’s been a long time since people got on in the City by being brash, harsh and, frankly, rude, if ever they did in the first place.
“There are some elements of that old world way that still linger, but when they’re discovered the culprits are swiftly removed.
“The Wolf of Wall Street was popular as a film but it was somewhat removed from reality. That sort of model of working was off-putting to women, to minorities, to all sorts of people. The modern financial world is much more diverse and outward looking.”
Mr Leahy has lived through many of the biggest upheavals in finance, including the boom in the 1980s and the technological sea-change that led to noisy trading floors being replaced by silent computers feeding traders real-time market information.
He said, “I remember when I started work at the brand new future exchange in 1982 and Billingsgate fish market had just relocated right next to Canary Wharf.
“I’m not exaggerating when I say that plenty of those buying and selling fish went straight into buying and selling on the trading floors. They had a feel for it.
“Then the pendulum swung, as it always does, and we thought we could calculate everything with computers, that we could calculate risk, and I think that was one of the problems with the financial crash of 2008.
“Now the pendulum has swung back again, but not quite as far as the Billingsgate fish market sellers.”
The two biggest events to affect the financial markets last year were the UK’s Brexit vote and the election of Donald Trump as US president. What does Mr Leahy make of it?
“Everyone who has tried to make a prediction about Brexit has been wrong, so it’d be foolish to make predictions as they are quickly confounded,” he said. “What I do think is that London’s financial services have a critical mass, and they’re here to stay.
“I also think, and I tell this to students, that new opportunities will open up in places like Germany and France, so knowing the language or being willing to relocate will be an advantage.
“It’s hard to say when it comes to Trump. There was an initial exuberance when he was elected. People expected a Keynesian push for the economy with good knock-on effects, but he’s having difficulties getting his more ambitious plans passed. The Republicans and others have been a lot less amenable than imagined.”
After a long career, Mr Leahy moved into training, so what does he think makes a good financial trainer?
“Well I think because of my lack of formal financial education, I’ve been able to explain quite complex ideas to people. I went the long way round, and can explain it.
“I don’t employ complex mathematics, and there’s some classical texts like John C. Hull’s Options, Futures and other Derivatives, which I was never able to read because of the mathematics, so I’ve found other ways of learning and explaining these things. I’ve found my own way.”