"It is not the past that is most important, it is the future": Q&A with HESTA's Rob Fowler July 2019
Rob Fowler, a pioneer of ESG integration, is hanging up his HESTA hat after a 15-year tenure, firstly as chief investment officer and then as executive, investment execution. We ask Rob what he'll miss and what he plans to do next, as well as his views on both the changing face of the industry and the future of our planet.
- What do you see as your biggest achievement at HESTA?
It is not the past that is most important, it is the future. I see facilitating a smooth transition to Sonya, our new CIO, as the most important of my achievements at HESTA. It was critical for our members that the next CIO had the right skills and mindset to create an investment function with the capabilities and structure to deliver great returns for our members as the size of the portfolio grows in the coming years.
- What will you miss about the role?
My HESTA colleagues, at every level of the organisation. It is wonderful to be working with people who share the same passion about delivering the best we can for HESTA's members. It’s such a part of the culture at HESTA and knowing you’re making a difference to the financial future of members is incredibly rewarding.
- How has investment changed in the past decade and a half?
The biggest change is the size of the portfolios being invested and, as a result, the size of teams required to appropriately manage the portfolios. Fifteen years ago we were just starting to emerge from the early stages of the development of the industry. The focus was on being lean with low-cost delivery, so economies of scale were achieved through outsourcing. Whereas now, low cost means attention to every detail and internalisation, as this will help capture the benefits of scale for members and achieve best-in-class returns. Internalisation requires team size and systems capability not dreamed of when I commenced at HESTA. Importantly and pleasingly, a number of Australian industry super funds are seen as global leaders in the way that we invest, particularly as responsible investors and in ESG integration. That recognition is well deserved.
- How do you feel about ESG integration becoming mainstream? Why was it important to you to introduce that at HESTA?
I didn’t introduce ESG to HESTA, the Board already saw governance as important. Hence, HESTA was a leading supporter of the creation of ACSI and Regnan. The importance of the governance of the companies we invested in was evident to me from my time as an analyst / portfolio manager, well before I joined HESTA. Our mutual recognition of the importance of ESG integration was important to me when I originally applied for the role, and I believe to HESTA when they appointed me
It’s been important that ESG integration has become mainstream. Without this broad recognition, the world would still be heading down the road of continuing to focus solely on short-term shareholder returns with scant regard for the impact on other stakeholders or managing longer-term ESG risks
- How concerned are you about the future of our planet? And what role do you think investment has to play in improving possible outcomes?
There are numerous problems facing the planet as a result of human impact. Climate change is the most talked about one, but the effects of various other types of pollution on land and sea, as well as the destruction of habitat, is something the human-race should be taking responsibility to mitigate, cease and clean-up. This does require the investment community to play a part, not only due to the need to provide investment capital, but also in helping drive the necessary solution. We asset owners appear to be one of the few voices willing and able to take a longer-term view of outcomes.
- What plans do you have for life after HESTA?
I have no intention of allowing my brain to fossilise, and I have a great depth of experience to share. So, I’m hopeful of developing a small portfolio of Board or advisory roles around investments / super and also with not-for-profit organisations. Naturally, their ethos will need to be consistent with my expectations of responsible investment integration. I am fortunate to already have one investment related Board role and have commenced discussions with a conservation organisation that I collaborated with a couple of years ago.
On the personal side, my recently retired friends have given me a strong case of pre-retirement envy. My plans definitely also include long bike rides, travel in Australia and overseas, improving my golf, as well as spending time with our new grandchild.
- What was the impetus for your career in finance?
In my ‘past life’ I was a chartered accountant and it was during this time that my interest in investing grew. This was the period of the stock market boom ahead of the 1987 crash. It was such an exciting time to learn about the markets. I was fortunate to get the opportunity to join a stock-broking firm in my late 20’s, then moved in to portfolio management 5 years later. I’ve managed to broaden and deepen my knowledge with each role thereafter, including qualifying as a Chartered Financial Analyst. My move over to the asset owner side was deliberate as I saw it was an area of massive future growth, and also an area with a greater likelihood of a true focus on their clients, the members. The investment role at HESTA has enabled me to leverage all those learnings.
- Where did you grow up and what was it like?
I grew up in Ballarat, when it was much smaller than it is now. It was the days when families took 4 week holidays over December/January and we used reef oil to tan up quicker. How things have changed! My life revolved around family, church, school, sport and music. Later on there was part-time work (including apple picking around Easter each year and the ubiquitous ‘box-boy’ and ‘night-fill’ roles at the local Woolworths.) I was a pretty good studier and particularly enjoyed economics.
I am pleased to say I still have some very good Ballarat-born friends, particularly from my university days, who also moved to Melbourne in the early 80’s to start their careers.
- With the benefit of hindsight, what advice would you give to your younger self?
Take advantage of the sliding-door moments. It is definitely what led me to the fantastic role that I have enjoyed over the last 15 years with HESTA and also in my personal life.
AND stop calling the peak in the housing market – you keep getting it wrong!