For super funds and their advisers

Lessons in creativity, the arts and the art of funds management

Meredith Brooks

Meredith Brooks … ‘I have to say, genuinely creative fund managers are very rare’

On the surface it seems like an odd mix of professional interests: investment management and the arts. There are massive differences, of course, but there are also similarities, according to Meredith Brooks, who has excelled in both environments. She spoke with Greg Bright.

Critical Path, of which Meredith Brooks is chair, is a research organisation for choreographers in contemporary dance, based in the beautiful ‘Drill Hall’ in a leafy part of Sydney’s harbourside suburb of Rushcutters Bay.

The former business head of Russell Investments in London, Sydney and finally New York, reflects on the practicalities of research – research of any kind. For instance, how do you initiate ideas, foster creativity and test those ideas?

As with funds management, the independent sector of the arts tends to represent the creative edge. One of Brooks’ two current directorships in funds management, at BT Investment Management, was spun off as a separately listed company from the BT Financial Group partly to allow greater creativity and access to ownership by the managers who drive performance.

But the creative part of Australian society, elsewhere, is undervalued, Brooks says. “You wonder why we are trying to be rich. It should be to experience a full enriched life, not to get a new Porsche.”

While research in funds management is far better remunerated than in perhaps any other industry, with the possible exception of pharmaceuticals or technology, it is still the poor cousin to those parts of the industry which gather or handle the money.

Her experience at Russell, from 1991 to 2004, mostly as a business head, showed her that people are less prepared to pay for research-driven consulting and advice than they are for execution. “The practical stuff always gets paid more,” Brooks says. It is the same in stockbroking, where trading tends to subsidise stock research.

“There is no doubt that the finance industry is ludicrously overpaid. But because we get paid in money, it can be measured. The contribution that other people make is harder to value.”

There are lots of studies about creativity and ideas in the arts as well as finance. Successful artists will work with people they know and trust but for creativity something else needs to be thrown into the mix.

“With artists, so much of it, to be successful, is their ability to get things done. There are lots of good ideas around but you have to convert them,” Brooks says. “With funds management, too, if you lack the courage of your convictions, if you can’t convince your colleagues of something, it doesn’t happen. It is more than having little light-bulb moments… But I have to say, genuinely creative fund managers are very rare.”

Her other funds management directorship is on the board of Balmain Investment Management, which specializes in real estate debt strategies. She says she is not so much interested in property but rather in helping develop alternative debt products.

“Our [latest institutional] fund is fixed income. It’s a commercial-mortgage-backed diversified fixed income product. There are not enough of those around. It’s not an engineered product. It has real assets and does real lending. That’s why I did it… We need an alternative to the banks and our maturing population needs more income solutions.”

Brooks started her career as an actuary with AMP before her first stint at the old Bankers Trust, in both corporate finance and in the financial services area. She moved to the former Towers Perrin at a crucial time, in 1987, when asset consulting in Australia as a separate enterprise started to gain traction with the then-fledgling superannuation industry. Towers sent her to London and it was from there that she joined what was then known as Frank Russell Company in 1991. It was at Russell that she really made her mark.

Brooks launched the first Russell funds outside of North America, for the UK, in the early 1990s, which were very successful given the large number of small corporate funds there, which were keen for new outsourcing solutions.

When she wanted to return to Australia, in 1996, the company gave her the chief executive position and the brief to do the same again. Competitors Mercer and the former InTech had already launched funds in Australia and Russell’s funds business and implemented consulting strategies also overtook its traditional consulting arm as the firm’s main revenue spinner here, as elsewhere.

In 2000, Craig Ueland, who had been sent from Tacoma, Washington State, to Sydney back in 1986 to establish the company’s Australian presence, was the global COO back in Tacoma (and later CEO). He initiated the move for Brooks to go to the New York office to head up US institutional business, where she stayed until she retired from full-time funds management in 2004. It was the first time a Russell business unit was headquartered on the East Coast and this tended to upgrade the firm’s image in the market.

There are a lot of good dance schools in New York and she took classes there, in both traditional ballet and contemporary dance.

Returning to Sydney she contemplated a couple of years’ break from the industry but a chance meeting at a funds management conference with David Deverall, then chief executive of Perpetual, ended up with her being appointed to the Perpetual board as a non-executive director soon after.

“I figure I can learn one new role a year,” Brooks says. “I’m an all-rounder. I don’t get fixated on any one thing.” And a bit of a rolling stone perhaps.

This personality trait was also a reason for her not pursuing her first love of dance as a career. Professional dancers have to be fixated, and work very hard it, just to make a living. Brooks says she has no regrets: “I have a lot of friends who were professional dancers. I think I had a lot more fun from dance [as an amateur]. And at least I’m not poor or crippled.”

From Towers Perrin through to her Russell years marked the move from a defined benefit environment to predominantly defined contribution. Award super was introduced in 1986 and super then became ubiquitous with the Superannuation Guarantee from1993. The transition has not been all good, she says.

“It was an interesting time to be in advisory. Now, the new norm has as much to do with [provision of] product. We’ve handed responsibility to the investor who’s not always in a good position to decide.”

Prior to Critical Path, Brooks chaired another arts organization, a pair of percussion music groups called Synergy & TaikOz, which share governance and administration. Synergy involves new music while TaikOz is a style of athletic Japanese drumming. Brooks remains involved, although she is no longer a director.

Thinking about her next move, she says that at some stage she wouldn’t mind doing something “more systemic”. She has worked on some projects with the Institute of Actuaries and has occasionally considered a government role. She also sits on an advisory board of Macquarie University.

In her spare time, which cannot amount to much, she still does ballet and contemporary dance – “after a fashion”, she says – but now also teaches Pilates.

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