Q&A with Dr Alex Backwell, AIFMRM Senior Lecturer

Dr Alex Backwell has been with AIFMRM since its inception in 2014 – first as a student and now as a senior lecturer and researcher. His career has grown as the institute has developed into a world-class centre for research and scholarship – giving him plenty of scope for international collaboration and cutting-edge research.

You have been with AIFMRM since its launch in 2014?

Yes, indeed. Back then, it was much smaller and still very much in its infancy in terms of scope and vision. Interestingly, if I had been at UCT one year earlier, I would not have been able to do the MPhil specialising in Mathematical Finance. I was among the first intake of students on the programme, and it was primarily due to the energy and passion of AIFMRM founder Professor David Taylor that I wanted to stay. Over the years, the institute has grown in stature and recognition with key relationships in industry and a vibrant research community that I am excited to be a part of.

What is your current role at AIFMRM?

I am a Senior Lecturer. I teach on both our degrees, the MPhil in Mathematical Finance and the MCom in Risk Management of Financial Markets, the former being the very programme that I took about seven years ago! My other priority, in addition to teaching, is academic research. My research focus is on the interest-rate markets, especially the modelling of interest rates and their volatility.

Could you perhaps expand a bit on your particular field of interest and research?

Certainly. My PhD thesis was about the mathematical modelling of interest rates and particularly the modelling of interest-rate volatility, that is, the potential variation of interest rates. At the moment, for instance, volatility is high in most financial markets, due to COVID-19 and the turbulence it has created. The interest-rate markets have been greatly affected, because of greater demand for simpler and lower-risk investments. The ultimate aim of interest-rate and other financial modelling is to understand and manage the risk associated with developments to the market and economy, both expected and unexpected. One of the potential new research areas I am interested in, in addition to continuing my PhD work is around a publication in the Journal of Finance by Luigi Zingales from the University of Chicago on Does Finance Benefit Society? This type of work has interesting implications, I think, especially in our emerging market context. Another area I’m working on is the replacement of LIBOR (the London Interbank Offered Rate) as the central benchmark interest rate.

You describe yourself as an academic at heart. What does this mean to you?

I suppose it boils down to being primarily interested in ideas and concepts. That is not to say that I am not concerned with how theory plays out in practice, or that practical and applied matters are not important, but I enjoy abstract thinking and building and expanding on current models of thought and academic theories.

Have the COVID-19 lockdown restrictions affected your way of working?

Not very much. As long as my internet connection is working, I can teach online and interact with other researchers and publications to discuss all aspects of my work. Connecting with other researchers often happens online anyway, as many are based in countries all around the world. Working remotely, i.e. from home, requires perhaps a bit of discipline and structure and I try to keep to a daytime routine.

What do you do when you are not working or teaching?

I have always been very interested in sports, particularly rugby, cricket and various martial arts. I loved playing rugby at high school, but in more recent years I have hugely enjoyed training and competing in jiu jitsu, a grappling/wrestling martial art and sport. I hold a purple belt and teach the beginners’ classes at my academy. There are interesting correlations between the pursuits of mathematics and jiu jitsu. In both cases, you have to accept some confusion and frustration and learn to persist until things become clearer.

Tell us a bit about your background?

I grew up in Johannesburg with my father, who has a background in accounting, tax and banking, and my mother who is a teacher. I went to school at St Stithians. I moved to Cape Town to study actuarial science and while I love the Mother City, I enjoy visiting Johannesburg and would say that I appreciate both cities for what each has to offer.

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