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.
Managers desert AMP: it’s more than about sex, lies and emails
Whoever’s fault it was – David Murray was probably too late to the battle to do anything constructive, assuming he would have tried, and the board was clearly moribund. The other senior management were possibly more concerned with their own positions than anything else. Whoever’s fault it was, the disaster that is AMP is reaching a climax. DAVID CHAPLIN* reports.
The latest twist in the sorry saga is that everyone seems to be deserting the sinking ship. In Australia, New Zealand and elsewhere, they’re heading for the hills. Just last week, the AMP Capital exodus has spilled over to New Zealand from Sydney head office. The chief executive in NZ, Bevan Graham, and long-time sales head, Greg McMaster, resigned last Friday (August 28). In a note to clients, Craig Keary, AMP Capital managing director, Asia-Pacific, who ran Australasia from Sydney before moving to the broader role from Japan in 2017, said: “Bevan has done an outstanding job of leading the New Zealand team and has established strong relationships across clients, consultants, industry organisations and colleagues. Bevan will remain with us until January 2021 and will work with us on a smooth transition…. Greg has shown dedication and professionalism; his integrity, expertise and strong client relationships will be missed. Greg leaves us next month after a transition of responsibilities.” Both Graham and McMaster would “have decided to leave to pursue other opportunities outside of AMP Capital”, Keary said. Hmm.
The NZ stories followed news in Australia last week where AMP Capital saw the exit of four key members of equities team in the wake of the high-level executive debacle that also ended the brief tenure at the top position for Boe Pahari. According to a spokesperson, AMP Capital global chief investment officer equities, David Allen, had also left the firm to “pursue opportunities outside the business”.
Earlier in August, Pahari, the recently appointed AMP Capital chief executive, was forced to step down following sexual harassment revelations. The scandal – which also claimed the scalps of David Murray, the AMP chair, and fellow director, John Fraser, who was previously the head of the Federal Treasury and before that the chief executive of UBS Global Asset Management in London, saw Pahari return to his previous role as AMP Capital head of infrastructure investments.
Allen’s departure coincided with the resignations of three other senior members of the AMP Capital shares team, namely: head of Australian equities, Genevieve Murray; co-head of sustainable investment, Emily Woodland; and, Kristen Le Mesurier, portfolio manager for the firm’s diversified multi-asset funds including its ethical investment suite. Emails swirled around the organisation.
Woodland and Le Mesurier, in particular, had also been instrumental in driving the environmental, social and governance (ESG) agenda for AMP Capital. While Allen had already left AMP Capital, Murray, Woodland and Le Mesurier would “remain with the business for the coming months to ensure a smooth transition for our clients”, the spokesperson said. “David, Genevieve, Emily and Kristen each have played a key role in resetting AMP Capital’s listed equities business and creating strong foundations for growth,” the statement says. “They leave with our best wishes.”
Meanwhile, AMP Capital has promoted Darren Beesley and Fiona Manning to co-portfolio managers of the Ethical Leaders Balanced Fund range. “Our new strategy recognises our investors in the ‘Ethical Leaders Fund’ range want strong ESG management of their funds and as well as strong returns,” the spokesperson said. “We believe expanding the role to include two high quality and experienced investment managers is the best way to deliver this outcome for clients.” Prior to the latest move, Beesley was senior portfolio for the AMP Capital’s ‘Core Retirement Fund’ while Manning held the role of senior sustainable investment analyst.
It all seems like it’s too little and too late. It also seems that AMP has never reinvented itself as a proper company. It has always remained an old-fashioned mutual, existing primarily to pay for its senior management and its board, rather than the “owners” – the unit holders. David Murray, the former chief executive of CBA, who developed that troubled bank’s culture, was an unlikely choice as AMP chairman in June, 2018, when AMP’s decline was accelerated by the banking royal commission hearings. Shareholders and customers would share in the industry’s disappointment. Charging dead people for life insurance was probably the final straw.
*David Chaplin is editor of Investment News NZ. Additional reporting by Greg Bright.
