Wake-up call?

Amid the doom and gloom of a Covid-inspired recession and widening inequality, one Maynooth alum is sounding an optimistic note about long-term, structural change in Western economies

But when Brian O’Reilly describes the nature of the economic fallout following the onset of Covid-19, it’s both apropos and perhaps even a bit encouraging. “It’s been an extremely unusual recession,” says O’Reilly, the Head of Investment Strategy at Italian investment bank Banca Mediolanum. “First it was a health crisis, which quickly became a very sudden economic crisis. The global economy just stopped – we’ve never seen that before.

What’s also unusual are the extremes to which authorities have been willing to plug the gap. Central banks have kept things rolling by slashing interest rates, allowing governments to borrow, and governments have paid private employees directly through various pandemic support schemes, so the fallout could have been much worse.” Still, says the 1998 Maynooth finance grad now back living in Dublin after time in New York and London, there will come a time to pay the bill. O’Reilly believes that will likely mean higher taxes on corporations and individuals in high income brackets.

He sees a shift, a reckoning even, coming in terms of widening wealth gaps and economic inequality across Ireland, the US and other western countries. “The big issue worrying governments around the world is the growing wealth gap. I’m not sure how much longer it will be tolerated anymore.” O’Reilly points to data showing that the Covid-caused recession has disproportionately affected those making the least. That’s hardly unusual in an economic downtown, but O’Reilly has cause to think this time the after-effects may be different. “I think this crisis will be a wake-up call. The so-called K-shaped recovery – where the less well-off are faring worse, while the more well-off have been the main beneficiaries from stimulus which has propelled the stock market higher, particularly in the tech sector. I think we will get more policies post-Covid to help bridge the gap.” “One such focus is higher tax. Ireland’s low corporate tax rates were the right thing to do 30 years ago to attract jobs to Ireland, but over time the gap has probably gone too far. Multinationals will have to pay more.

People and societies won’t tolerate companies paying little or nothing for much more. We need to fix housing and health, but structurally, Ireland is a very strong economy, with a very young population that is highly educated. The US multinationals like doing business with us, and Irish people tend to do well in multicultural environments. We should be confident in what we have to offer and that we will still attract international firms here without the need for extremely low tax rates.”

O’Reilly’s optimism extends to the jobs today’s young graduates will encounter. In finance, the opportunities are boundless compared to when he enterred the Irish job market in the late 1990s. “The higher level – or front office – finance jobs in Ireland were few and far between in the late ‘90s. The IFSC had only just gotten up and running,” he said, and thus headed to London, where he was fortunate to land a job at powerhouse Goldman Sachs.

He started down an accounting route, but quickly pivoted “to what I loved about my Maynooth course, finance and economics.” After successfully making it through a grueling 21-stage recruitment process, he secured a dream role at UBS Warburg working in macroeconomics and asset allocation – a position O’Reilly said put his Maynooth education to good use. “The finance course at Maynooth gave us access to all of the necessary and available tools at the time that then allowed us to hold our own with graduates from the London School of Economics, Cambridge and Oxford, which were the traditional hiring grounds for finance in London,” O’Reilly said. “We had the tools and then you had to go apply yourself and work ethic comes in. I didn’t take too many holidays in my 20s,” he recalled. “But the building blocks we had from Maynooth in finance and economics had been given to us, even if we didn’t know it at the time.”

O’Reilly moved to New York in 2008 for UBS at the start of the global financial collapse—a “seismic shift” for him professionally. He was leading a team as Head of Research for one of the biggest banks in the world at a time of crisis. After 13 years with UBS in New York and London, and on the verge of a move to Hong Kong, an opportunity came up in Dublin with Davy Stockbrokers that brought O’Reilly and his wife (fellow Maynooth Finance graduate Joan Tyrell) and their three children, home.

O’Reilly became Head of Investments and Chief Investment Strategist for Davy, leading a 20+ member investment team and transitioning the company from a heavily Irish stocks-based model to an international wealth management one. Two years ago, he was headhunted to his current position with Banca Mediolanum, a massive €40billion Italian asset manager in Dublin with ambitious plans.

“The best part of the job is that it’s always interesting. We spend our lives trying to answer big, sometimes impossible questions: Brexit, the US presidential election, Covid. What will these events mean for the financial markets that can change so quickly?”

Echoing his positivity about the future, O’Reilly said he loves seeing the influence for good that the investment industry can play in societal progress. One marker smart investment managers look to is good governance. “Big finance doesn’t have the best reputation for good reasons, but that is slowly changing. The biggest growth area in finance today is ESG (Environmental, Social and Governance). For example, companies that value gender diversity on their boards are a good indication of good governance,” he said. Other indicators might be a company’s environmental ethos. “Companies doing well on ESG issues will get the capital, those that aren’t won’t. It’s that simple. In this business we can reward good behaviour and punish bad behaviour at the highest level,” O’Reilly said. Maybe that’s why he’s so optimistic. And if someone from his vantage point can see – and be pushing for – a greater leveling, maybe we all have reason to be so too.

“Companies that value gender diversity on their boards are a good indication of good governance... In this business we can reward good behaviour and punish bad behaviour at the highest level.”