Just a few months in the role, Sunsuper’s chief investment officer Ian Patrick declares that the job is going well. It’s a necessarily guarded assessment.
“The tendency is to say that because it’s going well you’ve settled, but I think that’s premature from the point of view that any job of this nature has enough complexity that it’s six or eight months before you’ve really got your head behind it,” he says.
“That’s the risk, that you slip into [thinking], ‘yes, I’ve got my hands around it’, when the reality is you probably never have your hands around it, given how markets behave.”
After spending about quarter of a century in consulting roles, most recently as chief executive of JANA, Patrick has taken a step closer to what he calls “the purpose of why we do what we do” and is coming to grips with new responsibilities and the scope of the Sunsuper organisation.
Patrick says he left JANA “to find something else, another outlet for my particular experience and expertise. I didn’t see it in the environment I was in”.
“I have said it so I’ll stand by it, but I wouldn’t want that to be reflective of where NAB was at,” he says.
“It was from where I sat and thought about my options. The option, as I said earlier, of working closer to the purpose, closer to where the organisation has almost direct control of its destiny or decisions, was more appealing than expanding into a different area of wealth general management, or something of that order.”
“At different points in professional life you probably appreciate that more and less; maybe I have come to the point where I have been reasonably close, gone further away into a more management-oriented role, and wanted to come back. But didn’t want to just come to the halfway house – I wanted to go back all the way.”
Rich in purpose
Patrick says consulting is “rich in purpose, don’t get me wrong, in that there are plenty of investment challenges”.
“But I think you are always one step removed from the purpose,” he says.
“As closely as you try to identify with it and bring it to the advice you’re delivering, you’re one step removed. And here, you’re right up against the purpose – particularly in an organisation like Sunsuper, where the whole business is delivering to the members. Admin is here, everything is here.”
Patrick says the tasks facing both a chief investment officer and a consultant entail significant challenges and complexity – it’s just that it is different in each job. Within a fund, complexity arises from “detail and the direct accountability – very acute accountability – for outcomes in a world that is by definition uncertain”, he says.
“Complexity in the consulting environment comes from managing many masters and managing the greater myriad of conflicts that exist. There are conflicts of potential cross-pollination of client IP, conflicts of potential cross-pollination of manager IP, and you’re always at that pivotal point of trust in a consulting environment. That brings a complexity that isn’t as apparent here.
“So complexity is, I wouldn’t say equal, because it’s hard [to compare] when they are different. But there’s similar levels of complexity – they’re just different.”
Patrick says he was familiar with Sunsuper through JANA’s work with the fund, initially limited to infrastructure but later in a broader consulting capacity. He was also familiar with key Sunsuper people, including former chief investment officer David Hartley, with whom he had worked “at the start of the century, if you can coin it that way”, while at Mercer.
“And more recently, the likes of [chief executive officer] Scott Hartley and [executive general manager of product, projects and technical services] Jason Summer and [executive general manager of growth and advice] Michael Mulholland were people I knew reasonably well from time in MLC/NAB,” he says. “Knowing who they were as superannuation practitioners and executives appealed to me.”
But despite a certain level of familiarity, Patrick says he is still surprised by what he’s learned of Sunsuper since joining.
“Certainly for me, if you heard the popular talk, there was a feeling that profit-for-member funds were old, sleepy mutuals,” he says.
“That’s not my chosen phrase, but you’d hear that around the place. I am really struck by the extent of commercial sharpness, competitive pressure, strategic focus and complexity in a business like Sunsuper.
“Yes, I could look at it from the outside and say: 650 employees, self-administered. But when you get inside and see what that actually means, and the range of activities that go on – and what ‘leading the industry’ means in terms of the member engagement that Sunsuper is called out for regularly – that has also been one of the things I didn’t anticipate as much from the outside.”
Patrick’s brief at the helm of Sunsuper’s investment operations covers three broad objectives.
“It is to deliver us a capability that delivers sustainable returns, and by sustainable it’s competitive relative to peers, because at the end of the day to survive you’re in a competitive marketplace – whatever competitive means, and it can mean different things to different people,” he says.
“Ensure that the appropriate decisions are taken at the appropriate points in the governance cycle, so we’ve got best practice or strong practice in that space; and the third [part] is to ensure a level of transparency so that the trust afforded for implementation to the team can be regularly assessed or verified by the board and the investment committee.
“Now, that’s Ian going home and writing them down as to what have I been given as a brief, but I would say they are pretty clear.”
Keeping the operation focused
Patrick says managing the investment team at Sunsuper starts with keeping the operation focused on members and what they need.
“So my first approach is keep them focused on the end goal, which is very easy,” he says. “The second piece is to make sure the responsibilities and accountabilities are clear.
“Be supportive in reaching the decisions that you entrust people to reach. The relative uncertainty in the investment space means that the best analysis could lead to a decision that’s subsequently proven to be suboptimal, just by force of circumstance.
“And the last bit of my philosophy is people who take on the space are generally smart, are generally self motivated and are generally ambitious. That, in and of itself, allows them to get on and do what they need to do. You really just have to tap them on the sides from time to time and work with the behaviours in a group setting.
Patrick says a characteristic of consulting is that “there is never a paucity of input and views” but investment teams within funds need to work a bit harder to keep their horizons broad.
“You don’t have to see the tenth manager peddling thematic global equities, because you just don’t,” he says.
“Whereas in consulting land you have to, because there’s a chance that the tenth thematic global equity manager will have cropped up on some client’s radar and they’ll ask a view about it. So you have to listen, form a view, and move on.
“That skill or practice of taking in a range of input, filtering those and crystallising them into insight is invaluable in consulting land. And I think there are people in funds – and they might not like me saying this – that can benefit from that.
“But the advantage the fund has, if it does tap that broader universe of wisdom – its capacity to focus that on its particular challenges and the relevance to its particular portfolio – is a distinct advantage. You can narrow the line of inquiry – provided you’re not myopic or blinkered inappropriately – quite effectively and pursue what’s relevant to the portfolio. You know what you need, and you know the challenge that’s been put before you.”
Exists to help members
Patrick says he has spent “just a little” time listening to calls from fund members in Sunsuper’s Brisbane call centre and wants to do that more. It is a reminder that at the end of the day a super fund exists to help its members achieve the best possible result they can in retirement.
“We used to say at JANA we were influencing the retirement outcomes of a quarter of Australia’s working population,” Patrick says.
“The reason I come back to that statement is, that is what drives me. There’s a whole bunch of members, and you only have to listen to the member calls in the contact centre [to understand that].
“The influence that a small group in a very unambiguous setting can have on that, on the outcomes for those people, that’s the purpose at the end of the day. I get a kick out of seeing a team develop; I get a kick out of discussions with employers and others in terms of feeding back about investment markets. But that’s a bonus.
“The real purpose is doing something that we happen to have a modicum of skill at, on behalf of others, and hopefully do it cost-effectively and well.”
Patrick says he does not claim that Sunsuper’s focus on members is unique. At JANA he worked with REST and “it takes a different shape [there], but it is as dominant”.
“Which is another way of saying you could find a similar purpose somewhere else, and I’m not dismissing that for a moment,” he says.
“But the bit that is unique [to Sunsuper], and this may be a bit subtle, is the conversion of that to a focus on engaging the member, and making it about not only delivering to the member but ensuring that the member is part of that journey and not only feels served but feels they were privy to the definition of that service.”