Since the emergence of “Modern Portfolio Theory” and the “Capital Asset Pricing Model” in the late 1960s, institutional investors have taken a quantitatively driven approach to portfolio construction, looking to create portfolio diversification and obtain better risk-adjusted returns by balancing their asset-class exposures. This journey has seen several important advancements in thinking about how to optimally achieve desired results.
Funds that want to take the total portfolio approach first need to get the total portfolio view. To do that they not only need data – and lots of it – but a rock-solid understanding of exactly how they’re going to use it.
Henaghan calls an end to long day at AMP Capital
by David Chaplin
After more than 16 years at AMP Capital, plus a planned 15-month sabbatical which turned into 19 months, Sean Henaghan, the former leader of AMP’s multi-asset and multi-manager investment capabilities, last week quit the firm. He is currently smelling the roses in his native New Zealand.
Henaghan finished up in NZ following extensive travels through the Americas and was past due to rejoin his embattled employer but has instead opted to pursue other opportunities in either country. While he originally intended to return to AMP, he said last week that it was the right time to leave the company.
Since June this year AMP Capital has been embroiled in ongoing controversy triggered by revelations of sexual harassment proven against Boe Pahari, who began an ill-fated reign as chief that month, replacing Adam Tindall. In August Pahari was demoted to his old head of infrastructure job with AMP chief, Francesco De Ferrari, doubling as head of the funds group. Several other senior staff, including the chief and head of sales for the NZ business, subsequently resigned AMP Capital.
Henaghan said it was “sad” to watch the chaos unfolding at his, now, old shop but he was keen to return to the investment business in some capacity after realising a long-held dream of travelling with his wife through South America and up the far north Canadian province of Yukon. “I resigned a couple of days ago,” he said. “If a decent job came up as a CEO or chief investment officer in Australia or NZ I would be interested. But I would also consider serving as an independent member on investment committees, such as with KiwiSaver schemes, or even doing pro-bono work to get back into action.”
And for the immediate future, the Henaghans will be housed in Auckland awaiting the arrival of their first grandchild. “We’re flatting with one of my oldest friends,” he said. No doubt his current Auckland digs are a step up from the student accommodation in Dunedin where Henaghan earned his undergraduate degree at the University of Otago. “I encouraged my kids to study at Otago, too, it’s a great place to get a sense of NZ,” he said.
Despite spending a large part of his career in Australia, first with Watson Wyatt and then AMP Capital, Henaghan’s NZ links go beyond the Dunedin student experience. Originally from South Africa, he arrived in NZ as a teen, embarking on a post-study career in finance that culminated in holding responsibility for $120 billion of assets under the AMP Capital multi-asset division. However, the most recent extended stay in NZ was a surprise addition to the agenda, he said – another coronavirus side-effect. The Henaghans served their two-week COVID quarantine in Wellington, which put a full stop to further travel plans.
“I couldn’t go through quarantine again,” he said: being locked up for two winter weeks in Wellington with the only respite a short daily ‘exercise’ spell in the dark, drafty, dank carpark building would kill the travel-bug in anyone. Now in Auckland, and warmer (if not drier) weather on the way, Henaghan is keen to reconnect with old industry friends and establish new networks for the next phase of his career. He said NZ was well-placed to emerge in a stronger economic position from the COVID-19 crisis with its “safe haven” status likely to prove a selling point. As well, he said, KiwiSaver would underpin the local investment industry, building broader opportunities similar to the trajectory of the $3 trillion Australian superannuation market.
But in the interim, investment markets look exceptionally treacherous, he said. “If I was managing money today I would not be taking a lot of risk. And I think you’d have to be actively managing equities – stock selection will matter more – while the value-growth disconnect has to correct at some point. Investors will also have to look outside of listed assets,” he said.
Personally, he has invested in some NZ agricultural assets while his son has joined the online share-trading trend. “He’s giving me tips,” Henaghan said. “When your kids are giving you stock advice maybe it’s time to get out of equities.”
– Investment News NZ
