Tony Lally has resigned from his position as chief executive of Sunsuper, citing the desire to pursue non-executive director roles following six years at the helm. He told Investment Magazine that he achieved everything he’d set out to.
“When I joined it was very much a run-of-the-mill industry fund, but the work I’ve done over the last six years has really transformed it, I believe, into a world-class organisation,” he said.
Lally cited his achievements as bringing administration in house, changing the health service model and moving to a focus on retirement income rather than accumulation.
“I had a vision for the organisation, and to be quite honest, it was so ambitious I didn’t think anyone would believe me, so I didn’t really share it with too many people, just one or two confidantes. I’m very proud of the fact that… it’s regarded as the best fund in Australia.”
In his time at the helm, Lally more than doubled the size of the fund, taking Sunsuper from $11 billion funds under management to $24 billion.
On mergers, outsourcing and DC
However, Lally said plans for growth through mergers didn’t succeed due to resistance from others.
“I certainly had [wanted to] but it wasn’t shared by other people in the organisation unfortunately, so that’s why it didn’t happen. I certainly believed we had the capabilities to take on any major partner, but circumstances fell out of my control.”
Lally said mergers aren’t given the priority that they should as “so many other things get in the way”.
“Quite honestly, it’s an industry-wide problem. I admire those funds like First State Super that managed to pull off a wonderful merger with Health Super, and I think that’s a model for many funds in the industry. They now have the scale and capability to look after the members really well,” he said.
“A lot more funds need to look to the future. Now there’s a bit of a cliche that bigger isn’t always better but, I tell you what, you can do a lot more with a bigger fund than you can with a small fund.”
Lally said it’s difficult to offer really good value to your members using an outsourced provider, saying they aren’t “on the same wavelength because they have different drivers”.
“That is why I brought the administration in house. It’s impossible to deliver the kind of customer service that Sunsuper does when you outsource. It’s not possible. So the whole alignment end-to-end is only possible when you do it yourself. That’s what I set out to do, I’ve achieved it, and it’s a model for the industry to think hard about.”
Further, Lally believes Sunsuper adopted a leadership position for defined contribution during his tenure. “Australia is leading the world in DC. The rest of the world’s focus is on DB, but they’re all building towards DC. But we really have set the benchmark for DC on a global scale, to the point where any overseas funds really look to Sunsuper as the standard…”
The sun also rises
Graham Heilbronn, chair of Sunsuper, praised Lally’s contribution to the growth and increased commercialism of the fund.
While the board searches for a successor to Lally, Sunsuper chief financial officer Bruce Wilson has taken on the role of interim chief executive.
Heilbronn said Wilson’s 13-year history with the fund would ensure a seamless changeover.
“We’ll search high and low but we certainly want applications internally as well because we’ve got a really good executive team, and there may well be some there who throw their hat in the ring, and I’d encourage them to do so,” he said.