The OAL is yet to hand down its findings, (although it originally stated it would do so on June 30). The fund has declined to make any comments until then. “CalPERS temporarily rescinded the personal trading policy to allow time for review and to be responsive to staff who raised questions about it. We have received no word about a decision by the OAL. This is all we have to say at this time,” CalPERS told Investment & Technology at the end of last month. For some people, having a separate personal investment account while managing huge amounts of money for others is a clear conflict of interest. Sam Sicilia, chief investment officer at HostPlus, says he never has and never will run a personal investment account.
Sicilia is the sole member of the HostPlus investment team who makes investment decisions, while two other staff members run the administrative functions of the investments. Sicilia says all three are covered by typical good corporate governance standards when it comes to operating one’s own investment portfolio outside of work – namely, disclosure of personal holdings and activities.
However, Sicilia says, while corporations can exact minimum standards from their employees, as an individual you can do more if you wish. As a consequence, he has taken the high road. “I personally don’t have any investments outside of my super. Period,” he says.
Nor does anyone in Sicilia’s immediate family, still living in his household, hold any investments outside of super – except the family home. Sicilia believes having a separate account outside of the professional fund he is running would be “fraught with danger”.
Investment teams were sometimes privy to information before the market – from discussion with fund managers and the like about their next move – and acting on that information could easily become insider trading. “The ice can be pretty thin in some places and sometimes it’s just better to steer clear altogether,” he says. Yet Sicilia does not say his standard should be the norm. He was clear it was a personal decision he was more comfortable with but would not expect from his own investment team. As for the superannuation side of his investments, Silicia has his account with HostPlus and is treated like any other member. There are no perks for being the chief investment officer of the fund. “I have the same investment choice options as other members and have to go through the same process if I want to switch those options,” he says.