Jul 30 2024 44 mins 4
In episode 102 of the [i3] Podcast, we speak with Andrew Spence, Chief Investment Officer of the $9 billion corporate super fund Qantas Super. Qantas Super recently announced to merge with ART and we took the opportunity to look back at the investment strategy that Spence put in place as the fund's first CIO, the innovations along the way and lessons learned.
Overview of podcast with Andrew Spence, CIO of Qantas Super
02:00 I came on board when Qantas Super decided to split the CEO and CIO role into two roles.
05:00 When I started there were nine active managers in the Australian equity portfolio and no passive investments. Whatever the question was, the answer was not nine active managers.
11:00 The GFC meant we took a safety first, peer unaware approach to our portfolio. Because if members experience too much volatility they switch to a lower risk option
12:00 What I inherited was a bunch of commingled funds and no individual mandates. Then as we went through the GFC, what we found was that a lot of these products were gated and didn’t have the liquidity that was on the tin
13:00 There is increasingly less competition in the small and mid-market
14:00 Talking timberland
19:00 The delegation framework has been a competitive advantage for us
19:45 At the end of 2008, the chair of the investment committee came to me and said: ‘We seem to be holding you up a bit’.
21:00 The trustee’s role is to govern and the management’s team is to manage and be held accountable for the outcome they deliver
24:00 We saw a lot of member switching during the onset of the pandemic and that meant these members missed out on the recovery in the next 12 to 18 months
25:00 We didn’t hit any of our illiquidity tolerance levels, but we came close
29:00 Addressing sequencing risk through a glide path
33:00 I think it is important to make information is freely available across the team and is not just held by the CIO
34:00 By the end of 2019, the investment committee was pushing us to be more peer aware
39:00 Tax managed, centralised portfolio management saved us $250 million over 10 years
40:00 The partnership model has worked well for us
42:00 Backing managers early on in their career means we were invested in each others success
Overview of podcast with Andrew Spence, CIO of Qantas Super
02:00 I came on board when Qantas Super decided to split the CEO and CIO role into two roles.
05:00 When I started there were nine active managers in the Australian equity portfolio and no passive investments. Whatever the question was, the answer was not nine active managers.
11:00 The GFC meant we took a safety first, peer unaware approach to our portfolio. Because if members experience too much volatility they switch to a lower risk option
12:00 What I inherited was a bunch of commingled funds and no individual mandates. Then as we went through the GFC, what we found was that a lot of these products were gated and didn’t have the liquidity that was on the tin
13:00 There is increasingly less competition in the small and mid-market
14:00 Talking timberland
19:00 The delegation framework has been a competitive advantage for us
19:45 At the end of 2008, the chair of the investment committee came to me and said: ‘We seem to be holding you up a bit’.
21:00 The trustee’s role is to govern and the management’s team is to manage and be held accountable for the outcome they deliver
24:00 We saw a lot of member switching during the onset of the pandemic and that meant these members missed out on the recovery in the next 12 to 18 months
25:00 We didn’t hit any of our illiquidity tolerance levels, but we came close
29:00 Addressing sequencing risk through a glide path
33:00 I think it is important to make information is freely available across the team and is not just held by the CIO
34:00 By the end of 2019, the investment committee was pushing us to be more peer aware
39:00 Tax managed, centralised portfolio management saved us $250 million over 10 years
40:00 The partnership model has worked well for us
42:00 Backing managers early on in their career means we were invested in each others success
