The investment industry of Asia Pacific has evolved in leaps and bounds in the 20 years since AsianInvestor began publishing. To celebrate our 20th anniversary edition we asked a set of the most experienced and senior industry veterans to describe the major changes they have seen, both in their organisations and beyond.
We begin with an interview with Matt Whineray, chief executive officer of New Zealand Super.
After joining in 2008, Whineray rose to became chief investment officer in 2014 and CEO in June 2018. He guided the sovereign wealth fund’s asset growth and implemented its drive for lower carbon emissions.
Q. What have been some of the highlights of the fund’s operations?
In June 2009 we had just been through a pretty horrific year; the fund was down 22%. But we are now in the mid-40s [billions], so have grown massively in AUM and capabilities.
Under Adrian [Orr, former CEO] we worked strongly on developing our culture, especially as we have more then tripled in size in terms of personnel numbers. We have built teams and capabilities to direct our investments and have an RI (responsible investment) team that’s the envy of world.
Plus, we have implemented our climate change investment strategy. We have exceeded all our goals [to lower portfolio emissions] and are talking to the board about how reset them.
Q. What opportunities did you miss?
We have been a bit slower on the development of our technology capabilities and data. We are chasing it a bit more now and have a couple of years investing in tech to improve ourselves.
[These efforts] played pretty well in our working from home requirement [during the Covid-19 lockdown]. But others have increasingly focused on technology more than us.
Q. How well has NZ Super’s investment approach weathered Covid-19?
Eighty percent of our portfolio is equities, so we experienced that market volatility reasonably keenly through February and March; we ended 2019 with roughly NZ$46.5 billion ($29.96 billion), but at the low point we were at NZ$35 billion. We have since bounced back and are now about NZ$44 billion (as of mid-June).
What’s different for us this time [versus the global financial crisis of 2008] is that we have a much better handle on our risk settings and liquidity, which we have tested a number of times. We have managed our strategic tilting programme and take a long-only view of the markets and as the gap between prices and gap increases we buy, adding reasonable risk exposure into falls, and then we have sold as markets have risen.
Q. What are the biggest problems facing institutional investors?
It’s always very easy to get distracted by the massive shiny thing in front of you – which now happens to be a global pandemic. As we climb out of this massive hole, we need to think of long-run impacts.
One is climate change, and it continues to be the big one for us. Interestingly we were able to coalesce around an urgent response to the pandemic, but a bigger existential crisis exists in the form of climate change.
Another one for many institutional investors is whether it’s possible to meet their return target.
In terms of advice, I would say first, be clear what you believe in, be explicit about your investment beliefs and set up your risk tolerance so you don’t get keys taken off you at some point. Don’t go in size into any strategy that you can’t survive; you must survive the bad times to get to your destination.
This interview originally featured in AsianInvestor'magazine's 20th anniversary edition, which was published in late June.
Article updated to clarify RI is short for responsible investing, not return on investment as originally stated.
¬ Haymarket Media Limited. All rights reserved.