To be the managing director of Perpetual Trustees is, arguably, one of the toughest jobs in Australia. We’ll go into that in a minute. Geoff Lloyd, who resigned last year, can now leave the venerable old company, to be replaced soon by Rob Adams. Good luck Rob.
The main reason that Perpetual should be venerated is not because it has survived 130 years but, rather, it has survived many senior management departures over the past 20 years, including some of Australia’s best-known and best portfolio managers, and has hardly missed a beat with its investment performance or delivery of its trustee and other admin services.
All the more incredible is that Perpetual’s investment performance has withstood a weight of money which would test the best value managers in the world. Perpetual is, perhaps, one of those.
To put its age into context, the company was formed by a committee of gentlemen – no women of course – including Edmund Barton, who became Australia’s first prime minister from 1901. The company’s inaugural chair, in 1886, was the original James Fairfax
Adams, who leaves Janus Henderson where he was head of the Pan Asia region (including Japan), based in Sydney, is one of a small group who used to be known as the “wild colonial boys”. With his marketing director, Matt Gaden, and several other Australian adventurers of investment management, Adams took over Colonial’s UK expansion in the early 2000s, after the firm bought an emerging markets business in Edinburgh and had set up a London-based global investment operation. They were very successful.
Perpetual is a different sort of organisation to Janus Henderson or Colonial First State. It wasn’t that long ago, for instance, that you’d go into Perpetual’s former Hunter Street head office, a heritage-protected building, to be greeted by a receptionist, or perhaps two, who appeared to be in their 80s. They did make a nice cup of tea though.
A lot of the shareholders are also of the same vintage. When the GFC hit in 2008, and all the companies, such as Perpetual, which had mortgage funds that they wanted to close – rightly or wrongly – Perpetual had several clients of their mortgage funds who were in their late 90s, and some over 100. This caused an internal dispute. ‘Shouldn’t Perpetual use its balance sheet, for once, to look after these old clients?’ was a question asked by some of the management. In the end, Perpetual did suspend redemptions for a time. Several senior Perpetual fund managers, including Richard Brandweiner, now chief executive of Pendal Group (formerly BT Investment Management) in Australia resigned not long after after to become the CIO at First State Super. The Perpetual culture was, and is, a good one where folks can speak their mind on behalf of their clients (and receptionists too) and are prepared to vote with their feet.
Lloyd presided over a resurgence in Perpetual’s corporate performance after a dark period which included the brave, but ultimately flawed, internationalisation strategy introduced by David Deverall, now the chief executive of T-Corp.
Deverall followed Graham Bradley as chief executive, whose main failure was to not sell Perpetual when it’s share price was heading north big time. Bradley was the chief executive from 1995 until 2003. A polite and gentlemanly character, Bradley would always say, if I ran into him on the streets of Sydney: “Hello Jeff”.
Deverall, an experienced institutional marketer who joined from Macquarie, was followed by Chris Ryan, who fell out with the board quick smart over an Asia expansion strategy. Lloyd came in and sacked a lot of people early on, which the share market loved, but then rebuilt the business in good time. His legacy is a very good one, for both shareholders and staff.
We don’t know where Geoff Lloyd is headed, but we suspect and hope it will be within our industry and to his liking.
The big question for the incoming Rob Adams is this: how do you manage the trustee, admin and investment arms of the business all under the one roof? Geoff Lloyd backed away from making a call on having two pillars instead of three. In the new environment, Adams may not be able to do so. Vertically – or horizontally, for that matter -integrated financial services companies are not the rage at the moment.
As we say: good luck Rob. Perhaps you should poach Matt Gaden and a couple of those other old wild colonial boys too.
Back at the Janus Henderson ranch, Matt Gaden is the interim chief executive until the firm sorts out its succession planning.