Having a steady hand on the tiller in volatile times is essential for an investment committee. Australian superannuation industry veteran Merv Peacock has seen enough market downturns over a career spanning almost five decades to chart through choppy waters.
The outspoken former CIO of AMP Capital Investors brings day-to-day investment experience to his role steering overall strategy as chair of UniSuper’s investment committee.
Peacock and his committee recently guided the $28 billion fund into key infrastructure projects, reduced its exposure to European equities and moved more than $500 million into large-cap US technology stocks.
Peacock says the fund is cautiously optimistic about the investment environment, despite concerns about developed-world sovereign debt and whether China will falter.
“The reason we are optimistic is that we think the underlying investments themselves look a bit better than fair value.”
Last year UniSuper retained its position in SuperRatings’ top performance quartile for long-term investment returns. The fund’s balanced option returned 7.18 per cent for the six months to December 31, resulting in an average annual return of 7.17 per cent in the past seven years.
However, Peacock is no stranger to the vagaries of market cycles, having witnessed the frenzied mining boom in Western Australia in the 1970s.
As an institutional investor in the heady 1980s he also locked horns with failed wheeler-dealers Alan Bond and Christopher Skase when they bestrode Australia’s corporate board rooms.
But it was in the late 1980s and 1990s that he became known in the industry as one of the “three amigos” at AMP with former CEO Ray Greenshields and deputy Leigh Hall.
While reluctant to be drawn on his experience of having a ringside seat to some of Australia’s great corporate stoushes, Peacock has maintained his outspoken opposition to excessive corporate remuneration.
He was a trenchant critic on executive pay issues while at AMP. UniSuper has also been active on this topic. The fund reported that in the third and fourth quarters of last year, 17 per cent of the 89 resolutions it voted against involved remuneration matters.
Peacock says a growing focus by investors and their managers on governance in the companies invest in is one of the key changes he has seen in the industry in recent years.
“Almost all managers feel that they have some responsibility to take a view and vote.”
Having worked as a CIO, Peacock draws a clear line between the responsibilities of day-to-day management and the role of the investment committee.