AIBIM head predicts slow pick-up in market

The new head of AIB Investment Managers, Dr Eileen Fitzpatrick, is taking a cautious stance with regard to the performance of equity markets over the coming months but predicts they will begin to make progress again towards year-end.

Dr Fitzpatrick (41) was formerly investment director at AIBIM and now combines this role with that of managing director following the departure of the previous incumbent, Mr Maurice Harte, to the property group Treasury Holdings.

AIB Investment Managers is one of the largest fund management companies in the Republic, primarily managing the assets of pension funds for Irish and international clients.

It has more than £10 billion (€12.7 billion) under management with funds invested in Irish and international equities, bonds and property.

The new managing director says she is taking a cautious view of the markets. "There is a feeling around that money is very easy to make and you can't blame people for thinking that but you do have to be cautious.

"There is still a considerable amount of speculative froth particularly in certain sectors of the equity markets but this is beginning to unwind fairly well."

Dr Fitzpatrick says it is impossible to make a call on the future prospects for the Nasdaq Index of shares which is the most volatile of the various equity indices.

"A correction has begun and will continue for some time yet. The market has taken a very blanket approach to anything with a technology tag to it but the market is now sorting out the men from the boys."

The adjustment in valuations of technology, media and telecommunications (TMT) stocks, which is under way, will help to reduce the volatility of that market in the short term, according to Dr Fitzpatrick.

"Stock markets in general won't make much progress while things like this are continuing but they should settle down by yearend."

The US interest rate outlook has deteriorated as has the outlook for US economic growth with Federal Reserve chairman, Mr Alan Greenspan, signalling that he will slow US economic growth, she says.

"This will have short-term implications for equity markets. I would be cautious about equities in the short term, particularly over the summer months."

Dr Fitzpatrick is very upbeat about the prospects for the wider European economy though. She points to the huge potential for corporate restructuring and suggests there is much scope to enhance shareholders returns.

The new managing director has worked in the financial services sector since the 1980s and has spent most of her career working within the AIB group. From Dublin, she studied science at UCD, graduating with a PhD in chemistry.

Her move into investment management was initially inspired by the need to find a job in Ireland in the 1980s.

At that stage there was a shortage of finance graduates and the investment companies began to cast the net wider to recruit staff. She joined Montgomery Fund Managers in 1987 moving to AIB Investment Managers in 1989. After five years she moved to NCB Stockbrokers before moving back to the AIB-owned Goodbody Stockbrokers. She was later recruited to act as investment director at AIB Investment Managers in 1997.

Dr Fitzpatrick says it was very beneficial to have worked on both sides of the investment markets, as an asset manager and as a client.

The combination of investment director and managing director roles is a new departure at AIB Investment Managers. "I believe it gives me a very strong mandate to make the changes I need."