When
someone is nervous about having to
speak in front of lots of people,
they are often told to imagine their
audience naked. The theory goes that
if the crowd looks ridiculous in your
mind’s eye, you’ll feel less ridiculous yourself. In a similar
spirit, Unbalanced presents
a tool for funds managers who are
jittery about presenting to an asset
consultant. Or more specifically, one
of Australia’s
most influential asset consultants,
JANA gatekeeper-in-chief John
Coombe. Sure, a ‘yae’ or ‘nae’ from
John can radically transform the
future of your business, but
picturing him as a pink Teletubbie
would have to help calm the nerves.

The picture you see here has its origins in another good cause. In late March, Coombe was  persuaded to join one of three JANA teams competing in Trailwalker, an annual 100 kilometre walk staged in both Sydney and Melbourne which raises money for developing word charity, Oxfam. Coombe got together with three of his Sydney
office colleagues – JANA CEO Ian
Patrick, and researchers Suzy Yoon
and Georgina Dudley – to form a team
known as ‘Sydneytubbies’ for the Melbourne event. “I’ve got no idea where that came from,” Coombe told us last month, generously taking our call while on a month’s leave.

“I think our IT guy dreamed it up.” The toddler-friendly TV stars certainly worked a treat in the serious business of drumming up donations – the Tubbies raised $19,485, the third most of any team – with many industry supporters promising to double their contributions if Coombe wore the pink suit on the hike from Wheelers Hill to the Yarra Valley. Just as many were sceptical that John could complete the 100ks without being carried over his teammates’
shoulders at some point, but how
wrong they were.

“We did it in exactly 24 hours, and I felt fine afterwards,” Coombe says. “They really look after you, there’s masseuses and podiatrists on the trail…I had some blood blisters come up so they had me walking on 2 centimetres of foam.” That’s pretty hardcore, but not quite as crazy as colleague and fellow Trailwalker, Melbourne consulting head David Holston. “David got a stress fracture in his leg during training, but he didn’t take the X-ray to the doctor because he knew what the outcome would be!” Coombe reveals.

Hats off then to Mr. Holston, for enduring what we imagine was considerable pain in the name of a good cause, and with teammates including ‘investment outcomes’ heads Ken Marshman, even winning the over-50s category. An
inconvenient spoof for Magellan Underperformance
is, now and then, an inconvenient
truth for funds managers. And thanks
to the GFC, they’ve recently had
plenty of experience in explaining
why it has happened.

At the annual
van Eyk conference, director Mark
Thomas nominated some glowing
examples of backpedalling by
managers in explaining their tumbling
returns, when he unveiled the inglorious
Hologram Awards (winners receive
only the base of a trophy, hence the
name). One category was the ‘Inconvenient Truth’ award for ‘creative stories about performance’. Among the nominations was an email exchange in which Frank Casarotti tested out his defence of the MagellanGlobal Fund, which returned -13.5 per cent in the 6 months to March 31, on the ear of Graham Rich from niche publisher brillient!

“While recording negative absolute returns for the 12 months to July isn’t ideal, the relative returns are
reasonable given the current market
turmoil,” Casarotti explained. “While performance isn’t everything, the Magellan Global Fund is on track to deliver satisfactory long-term, risk-adjusted returns to unit holders. Please feel free to call if there’s any further information you need.” “Good story, Casa,” Rich responded, before rubbing some gloss off the manager’s words. “I think it says: ‘We’re marvelous, and we are doing the best we can in
difficult circumstances, so count
yourself lucky you’re with us and
not someone else’.

Have I got it
right?”“Spot on as usual, Richo,”
Casa fired back. Unbalanced assumes that other managers in the room had rolled out similar stories to disgruntled clients, since a few knowing chuckles were heard as Thomas read the email aloud. But we reckon their clients wouldn’t haven take the bad news with as much humour as the van Eyk director, at whose behest Casarotti punched the air three times in victory upon receipt of the trophy stump. Trustee
of the Year remembers the real bad old days Tasplan
chair Doug Fry was a popular co-winner
of this year’s Australian Institute of Superannuation Trustees’ ‘Trustee of the Year’ Award, not least because the passionate advocate of super for working Tasmanians is a straight shooter.

Fry doesn’t pretend that the current environment isn’t challenging for
members, but he reckons they’re
doing okay compared to before he
became a founding trustee of Tasplan
20 years ago. “This was when
retirement savings for blue collar
workers was pretty much a dream,”
and by Fry’s recollection the reality
for many white collars wasn’t much
better. “I was with the clerk’s
union, and   we had a superannuation
policy with a life company that I’d
probably rather not name. They would
update the value of the fund
annually, and it got to where we
couldn’t quite figure out the numbers.

Eventually we realised that 25 per
cent of all new contributions went as
a fee to the life company, it was truly outrageous.” The clerks were
laughed out of the room when they
tried to negotiate a lower
commission, so Fry says they froze
the contributions and set the wheels
in motion for the creation of a not-for-profit
super vehicle, Tasplan. As a
trustee, Fry makes no bones about
Tasplan’s support of Tasmanian property
and private equity investment. “If
we support the Tasmanian economy, we
grow employment here to the benefit
of the fund and all its members,” he
declares.

Fry called his Trustee of
the Year gong “an award for Tasplan”.
In a neat co-incidence, we talked to
him the same day that one of those
old life companies he refers to,
AMP, launched a no-commission, low
cost super product for Gen X and
Y-ers. You’d have to credit Fry with
creating some of the competitive
pressure that led to such a thing. The Trustee of the Year prize is more than kudos, by the way. A rather snazzy plate was delivered to Tasplan’s Hobart
offices last month, while Fry and
co-winner Bill Watton (Vision Super/VicSuper) receive a scholarship to attend CMSF’s Global Dialogue study tour to Hong Kong in 2010.
     

 

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