Equip Super CIO on re-energising his investment team

Andrew Howard says the revamp is the culmination of a six-month drive to get the right people in place.

Equip Super has revamped its investment team by making three new hires and three senior promotions. Have you finished bolstering the team? or do you have further to go?

The restructure of Equip Super's investment team is the culmination of six months of work where we assessed not only the skill sets required to complement the existing team but also worked to ensure that we had the best structure to oversee and manage all aspects of the investment function.

Our approach was to identify candidates with considerable experience in investment markets. We see it as an extremely positive asset to have all areas of the investment strategy overseen by professionals who have worked in the investment field for over 20 years.

While we are always open to adding experienced and talented candidates to our team, Equip's current priority is bedding down the new structure and ensuring our new appointments have a positive onboarding experience.

Newly promoted Darren Rosario and Libby Sparshatt have been with Equip/Catholic for years. How do you retain senior investment people in such a tight labour market? And, how did you attract top professionals like an operations expert, a ESG specialist and two senior portfolio managers covering alternatives and real assets.

We believed it was extremely important to ensure that we attracted the right candidates to join the team, so we were prepared to take our time.

We found that managing the process ourselves, rather than externally, allowed us to leverage our existing networks. This enabled us to identify candidates that may otherwise not have come across our radar.

In terms of the 'pitch', we believe a small team can provide terrific opportunities for experienced investment professionals to come in and take ownership of their respective briefs. We are open to new ideas and ways of working, and I think that resonated with the new team members during the interview process.

Importantly, our approach was to ensure that we not only got to know the prospective candidates but that they got the opportunity to meet the team they would be working with. For us, it was about 'fit' and ensuring that we were introducing skill sets to complement those that already existed within the team.

In addition, a big part of building and retaining a team is ensuring that you recognise the internal talent that already exists within the business.

To that end, it was terrific to recognise the contributions that both Darren and Libby have made to the business over a long time via their respective promotions. Providing such opportunities to existing team members can go a long way when retaining valuable talent.

As funds grow, it gets harder to effectively allocate that capital. How is this for a $30 billion fund? Is that a perfect size? Or are you planning to grow organically or through a merger?

We certainly believe that, as a $30 billion fund, we are big enough to leverage the economies of scale that can be generated as a fund of our size, while also being able to take advantage of opportunities that may be challenging for significantly larger, or mega, funds.

At our size, Equip Super can remain nimble and agile to seize opportunities, while remaining mindful of the current market environment - we see this as a real positive. We are also not impacted by capacity constraints that are evident in some markets, such as Australian small caps. 

We see ourselves as an attractive strategic partner for the fund managers that we build relationships with, and this is certainly evidenced by the very competitive investment fees that we have been able to negotiate on behalf of our members.

While we are certainly open to future mergers, for us it is about ensuring that any inorganic growth opportunity is done through the lens of what is in the best financial interest of our members.

You said the new hires and promotions ensure Equip Super can navigate an increasingly volatile market outlook. You predict a recession saying asset allocation is the most valuable tool in your investment tool kit. Are you diversifying differently from other funds? Has your investment style changed?

Firstly, it is important to stress that investors should not be 'reacting' to short-term noise in markets. As a long-term investor, Equip Super can afford to be patient and take advantage of opportunities as they arise. 

This is certainly the case when facing volatility, such as currently faced by the market. A great example of leveraging market volatility is fixed interest; we have increased our exposure to bonds after seeing bond yields move higher in line with increasing interest rates.

For many years, with record low interest rates in place, bonds have not been an attractive investment with yields close to zero. But today, we see bonds as offering true defensive characteristics again and have been increasing our exposure. Any decisions we make should always be through the lens of a long-term investor, and at times, this can feel uncomfortable, particularly when we continue to see the ongoing volatility in markets. However, as a patient long-term investor, this can also provide us with opportunities.

In a market where every basis point counts, it is more important than ever to adhere to our long-term investment discipline. This centres around a strong focus on diversification, not just across asset classes, but also within asset classes. So, while we expect market conditions to remain challenging for some time to come, we believe the investment strategy we have in place is well-positioned to contend with the ongoing challenges that all investors are currently experiencing.