Paul Costello, the founding chief executive of the $150 billion Future Fund passed away this month after a battle with lung, brain and liver cancer. Like about 20 per cent of lung cancer sufferers, half of whom are likely to die within 12 months of diagnosis, Mr Costello had never smoked. Lung cancer is the biggest killer of all cancers.
Future Fund chief executive David Neal delivered a eulogy on Mr Costello’s work life at a memorial service at Abbotsford Convent in Melbourne on November 12, 2018. The memorial was attended by many from the investment and superannuation industry, as well as those from Paul’s other walks of life.
Donations to lung cancer research in Mr Costello’s memory can be made at https://foundation.petermac.org/paul-costello
“I am extremely honoured to have been asked by Paul and Denise to say a few words here today. Paul’s work was important to him, and I want to celebrate this part of his extraordinary life with you.
The first time I met Paul was at a conference in Sydney, maybe around 2004 or 2005. He was on a stage talking about the New Zealand Super Fund and I remember being struck by his poise and grace. Immaculately groomed and dressed, he spoke with humility, authority and eloquence. In our industry we are used to seeing brash people on a stage. To say Paul stood out as something quite different, is an understatement. Little did I know at the time that the person on the stage would have a deep impact on me, shaping me both as a leader and as a human being.
Let me give you a very quick overview of Paul’s quite extraordinary career. After stints as a teacher and South American travel guide of all things, Paul found his way into the superannuation and investment world here in Melbourne, and ultimately to the large industry fund Superannuation Trust of Australia, where his career took off and he rose to be CEO. From there, in 2003 he was lured across the ditch to NZ to establish his first sovereign wealth fund, the NZ Super Fund. Then in 2006 he moved back to Melbourne to repeat the trick at the Future Fund – how many people get to establish two world-leading sovereign wealth funds from scratch?
When Paul left the Future Fund at the end of 2011, I know he was worried about what might come next and whether he could be useful to anyone. But of course he needn’t have worried, because his experience and leadership strengths were in high demand. Before long he was chairing Blackstone in Aus and NZ, reporting in to the founder and President Tony James and I think rather enjoying getting an up close and personal view of the inner workings of the archetypal Wall Street firm. Quite the juxtaposition of his own mild-mannered, people-centred style with the rather more alpha-male New York culture. He was invited to join the Payments System Board of the Reserve Bank of Australia and the Board of AIA. He became an advisory committee member of CIC – China’s sovereign wealth fund. He became a trustee and investment committee chair of Qantas Super, and he chaired the global infrastructure committee at QIC. In the end, Paul thoroughly enjoyed this latter stage of his career. The tragedy is that this stage was cut so short.
So what was it about Paul that made him so successful? Not surprisingly, there are a variety of features. Let me try to paint a picture of them for you.
Paul thought deeply about integrity, about ethics, about doing the right thing. He was very clear in his mind that the only decision you make that is truly ethical is the one you would make if you could be sure there were no adverse consequences to you either way. If you make a choice because to do otherwise might cause you pain, embarrassment or some other difficulty, you are making the choice out of self-interest, not ethics. In the current financial industry vernacular, Paul was a man who immediately and naturally went to the question “should we”, not the more common “could we”.
Paul took an interest in others and had a natural curiosity about their work. I have to say that this curiosity occasionally created some consternation around the office. He would enjoy a discussion with some of the team, share a thought and then move on. In those moments he saw himself as simply someone who was interested, wanting to understand and learn from the professionals he respected around him. In the moment, he perhaps forgot that he was the CEO, the big boss, and in those times the team was left wondering whether the shared thought was actually an instruction they should be acting upon. It very rarely was.
And that was one of the contradictory features of Paul. He was such a great leader, but I’m not sure the mantel of CEO was particularly comfortable for him. His humble nature meant he perhaps wasn’t always entirely at ease with being in charge. But at the same time, this nature was what made him such a great leader. There was an authenticity about Paul that drew people to him. People trusted him, respected him. They wanted to follow him.
He empathised with, guided, supported and ultimately empowered those around him. He saw his mission for each day as being to make others around him successful. I know I speak for all of the senior team he hired at the Future Fund in those early days, many of whom are still there over a decade later, when I say that from the moment we were hired, Paul gave us full autonomy to get on with designing, implementing and running our parts of the business. There were plenty of quiet conversations filled with questions from him, and the occasional raised eye-brow. I have to say he was also pretty handy at wielding the red pen on our draft Board papers. But amongst all that, there was rarely a CEO directive. Paul allowed those around him to grow as leaders and own their own outcomes, good or bad.
But nobody is perfect. And if I had to point to one area where Paul’s quiet, empowering diplomacy escaped him and we saw some autocratic tendencies, it was when it came to sartorial style and personal grooming. Non-compliance with the dress code was the one thing likely to break through that calm demeanour. After intense lobbying from staff, and no doubt against his better judgement, Paul eventually agreed to a casual clothes day once a month. Never comfortable with the concept, Paul was incapable of not giving a withering, ‘What on Earth are you wearing?’ look to anyone falling short of his standards, which was frankly nearly all of us. Well, Paul, I know you will have noticed that I’m wearing a tie, and I hope you will approve!’
But in all seriousness, Paul was one of the most selfless leaders I have ever encountered. He just never seemed to be thinking about himself. Indeed this was epitomised in the final few months of his life. If ever someone has a right to turn a little self-centred and worry about themselves, it surely has to be when you have a terminal illness and your strength is leaving you. But in all my conversations with him over those last months, Paul was desperately worried that he was letting other people down. Even in his last week, lying in the palliative care unit, he still fretted that he wasn’t able to provide the support he wanted to into a governance initiative under way at Qantas Super. Gordon McKellar and I urged him to focus on himself more, but that just wasn’t who he was. For him, it was all about the success of others.
In the current climate around financial services, its interesting to observe that Paul’s great success as a selfless leader has come within an industry that has tended to reinforce and reward the concepts of ego and self-interest. The financial world has lost a shining example of how its leaders should be.
Paul had an ability to see things in people. So many people who have had the honour of being led by Paul have talked about how grateful they were that he took a chance on them. I am certainly in that camp – how many people setting up a brand new $60bn sovereign wealth fund under the glare of the public spotlight, would take a chance on a Pom who’d never managed a dollar in his life as the first Chief Investment Officer? Not exactly the easy or obvious choice, and one that I am of course eternally grateful for. But I am just one of many.
Mark Delaney made some interesting observations to me the other day. Paul’s first CEO role was with STA. Despite only having that role for three or four years, before getting the call to head the New Zealand Super Fund, Paul hired Mark himself, now the CIO of the largest superannuation fund in the country. He also hired David Atkin, now CEO at CBUS, Anthony Rodwell-Ball, who was CEO of Non-Government Schools Super for a decade, and Damian Green, who is now the CEO of Metlife in Korea. Not a bad first few hires as a CEO, all in a few years.
There will be many in this room, and others who couldn’t make it today, who worked with Paul and will have their own stories. They will be able to talk about how he was able to shape and develop them in their careers, and even more importantly as people. I encourage you all to share those stories over a drink later.
As the inaugural leader of the Future Fund, Paul endowed it with his personal characteristics. He imbued it with a very strong sense of humility, integrity, mutual respect and professionalism. In this way, through this nation’s $180bn sovereign wealth fund, Paul’s legacy lives on and I’m sure will continue to live on strongly for many years to come.
And I’m sure his legacy lives on in the same way, just as strongly, inside the other organisations and the very many people that Paul touched throughout his wonderful career. The women and men that have had the pleasure of working with Paul will take and spread the qualities that Paul imprinted on them wherever they go, in their professional and personal lives.
Paul, husband, father, brother, son, friend, teacher, mentor and role model – you will be sorely missed.
