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.
King back to Sovereign … and a more relaxed lifestyle
Ray King, the veteran asset consultant, has finished up a four-year stint at IOOF, where he had been assisting with its relatively small alternatives portfolio. He will now be concentrating on his private Sovereign Investment Research work and taking more time out for grandchildren and travel.
While IOOF has let a good number of people go due to its mergers with ANZ followed by MLC, King has nothing but praise for the investment folk with whom he has worked, on a part-time basis, penning a note which said: “IOOF has been a great investment team to be part of.”
King has had three major asset consulting jobs over the past 30 years, on top of Sovereign, starting with Towers Perrin (now Willis Towers Watson) in 1990 and then becoming the launch head of consulting for Industry Fund Services (that arm evolving into Frontier) in 1994. He started Sovereign in 2005 and grew that business to a peak consisting of about eight other consultants just prior to the GFC, which hit most alternatives managers and their clients badly.
He says he is proud to have assisted many other consultants on their way over that time. One standout, who he likes to say he was privileged to recruit twice – once at Towers and then at IFS – was Fiona Trafford-Walker, who moved into a busy semi-retirement mode last year. Trafford-Walker became the heart and soul of Frontier and was recognised as one of the most influential asset consultants in the world.
Others at Sovereign included Ross Barry (now CIO of the merged Tasplan and MTAA), Helen Murdoch (who became a partner at Mercer and is now general manager of corporate super at MLC), John Peterson (who runs the Peterson Institute), Sarah Azzi (who also moved to Mercer and is now at Anacacia Capital) and Scott McNally (ex-Mercer, now investment manager for private markets at Sunsuper).
King also recruited Damian Moloney at IFS, who went on to run Frontier and is now head of international investments for AustralianSuper in London and Peter Lambos (head of institutional business for Pendal Group).
After working through the aftermath of the GFC, King joined some of his former colleagues for three years at Mercer, starting in 2012, where he also became a partner, returning to the relative freedom of Sovereign in 2015.
King always had an entrepreneurial bent, which was the main reason he left Towers for the opportunity to work with Garry Weaven on starting IFS. He says that Towers was the first asset consulting firm to start a mastertrust business, in Queensland, but he and some others were unable to prevent the actuaries who then ran the practice from selling it because it was “non-core”.
This left a wide door open for Mercer to move into funds management in Australia and then globally, followed by InTech (now part of Morningstar), Russell Investments and, to a certain extent, JANA. Willis Towers Watson finally succumbed more recently, starting through its ‘Outsourced CIO’ business.
