YouSaid · the spoken record

Kristian Fok

lines on the record: 85
first: 2018-08-27
most recent: 2018-08-27
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“It's taken me a while to sort of understand that and understand the power of that. And had I known that a bit earlier, I think I probably would have been able to do a lot more and I would have learned a lot more.”
2018-08-27 · Capital Allocators · Kristian Fok – Australia's CBUS Superannuation CIO (Capital Allocators, EP.66) · IDENTIFIED FROM THE TRANSCRIPT · source
“Okay, so as an actuary, you're all about numbers, you're all about facts and figures, and you know that you can do that. So I think when you first start your career, you think about yourself and your own capabilities and proving yourself. You almost think of it as like a competition. I have come to appreciate that way to succeed is not just, I mean, you need to make a contribution and you need to understand what your capabilities are, but you're going to succeed far more with others than just by trying to do it all yourself. And that includes being willing to admit you're wrong or that you don't know something or to be challenged, to be open to challenge. And so I was particularly more recent times that's something I've learned that's very valuable.”
2018-08-27 · Capital Allocators · Kristian Fok – Australia's CBUS Superannuation CIO (Capital Allocators, EP.66) · IDENTIFIED FROM THE TRANSCRIPT · source
“Not invested in for a period of time because the state balance sheet didn't allow that. And I think one of the things that's just really, I found that's really fascinating because when I sort of think about how am I going to approach my board around something I want to do. Knowing that you've got the chair of the board has sort of done that on a state basis and is actually receptive to ideas and pursuing something a bit different, but having a very clear purpose around what you're trying to achieve has been very helpful. But I think from that, if you're in management, you're working with boards, I think getting a good understanding around some of the history that your directors have with Therefore, how that sort of shapes the way they look at the world and look at what you put forward, I think, a really important thing.”
2018-08-27 · Capital Allocators · Kristian Fok – Australia's CBUS Superannuation CIO (Capital Allocators, EP.66) · IDENTIFIED FROM THE TRANSCRIPT · source
“One of the things that's quite interesting about our board is that our chair is the ex-premier of Victoria, which is like the governor of the state. And there was a book that was produced on his time as Premier of Victoria called Catch and Kill. And the interesting thing is that when he got into Parliament, it wasn't expected, there had been a long period of fiscal consolidation and responsibility from the Conservative side. and he was from the slightly equivalent of the Democrats, the Labour side. And they only just got in. He had to negotiate a minority government. And the book walks through how he took that new government and worked with very many different people to create a vision around how are they going to actually make a change and do things differently and invest back into the state which had been obviously”
2018-08-27 · Capital Allocators · Kristian Fok – Australia's CBUS Superannuation CIO (Capital Allocators, EP.66) · IDENTIFIED FROM THE TRANSCRIPT · source
“Like getting out there, talking to people and so forth is actually quite challenging when I reflect on what she did. I thought that's amazing. So from that, I think if you've got something, a good idea, Be afraid to put yourself in a bit of an uncomfortable position to actually pursue it is what I got from her.”
2018-08-27 · Capital Allocators · Kristian Fok – Australia's CBUS Superannuation CIO (Capital Allocators, EP.66) · IDENTIFIED FROM THE TRANSCRIPT · source
“My dad was an engineer, as I mentioned before. It's quite funny he'd come back and you talk about these hospital projects and cogeneration and even the early days of mobile phones and things like that. And he set up his own business because he wanted to make her name there. I think for me that example of really not just doing the same old stuff but being inquisitive about what some of these newer things are has been quite impactful. So for me, do what you do well but actually look for the next opportunity is there. For my mum she got married early, hadn't finished high school but went back and did her high school certificate. She set up her own small business when we were young. What I've realised since then is like these things are very challenging for me.”
2018-08-27 · Capital Allocators · Kristian Fok – Australia's CBUS Superannuation CIO (Capital Allocators, EP.66) · IDENTIFIED FROM THE TRANSCRIPT · source
“But fortunately, I hadn't injured anything, although I think I came close. One of the things that's quite interesting though for that is that when you ski, I mean, you talk to Snowplow, you can't snow plough down a steep slope, you actually have to go with purpose and intent. I think probably the same could be said around the way that we're thinking about how we're changing our investment approach. Things sort of in a trusty environment, it's very easy to sort of snow plower and be cautious. I think the real gains are take more of a risk, but you do have to do it seriously and you have to know the risks and know what you're in for, but you have to go in with good, strong intent.”
2018-08-27 · Capital Allocators · Kristian Fok – Australia's CBUS Superannuation CIO (Capital Allocators, EP.66) · IDENTIFIED FROM THE TRANSCRIPT · source
“I learned to ski, my brother taken up snowboarding and he encouraged me to come along with him. So the riskiest thing I did was actually just follow him around to the different slopes. He was taking me on black slopes and everything and I would never have done that My own right. I think there were a couple of occasions where trees got a little close to comfort.”
2018-08-27 · Capital Allocators · Kristian Fok – Australia's CBUS Superannuation CIO (Capital Allocators, EP.66) · IDENTIFIED FROM THE TRANSCRIPT · source
“Have heard me talk about this a bit. I think the industry itself, I mean, It just astounds me that asset management industry can make 40% margin on their revenue. I mean, there's not many industries that sustain that. So for me, I think this distance between the beneficiaries and where the money actually goes and how that distorts decision making makes you think very narrowly is something that I'd like to see the industry address and change.”
2018-08-27 · Capital Allocators · Kristian Fok – Australia's CBUS Superannuation CIO (Capital Allocators, EP.66) · IDENTIFIED FROM THE TRANSCRIPT · source
“Think about what investment banks do, they're really smart people, they're able to take ideas, pull them together and make them investable, then they sell it on and make a lot of money from it. So we sort of want to have the capabilities of like an investment banker with the intent and the heart and soul of what we have today. I think that would be a very powerful proposition.”
2018-08-27 · Capital Allocators · Kristian Fok – Australia's CBUS Superannuation CIO (Capital Allocators, EP.66) · IDENTIFIED FROM THE TRANSCRIPT · source
“An area where it's lower priority for us to pursue because we have these other strategies that we think that we can pursue.”
2018-08-27 · Capital Allocators · Kristian Fok – Australia's CBUS Superannuation CIO (Capital Allocators, EP.66) · IDENTIFIED FROM THE TRANSCRIPT · source
“I do feel that there's only a very small handful. I believe that really earn those and that it's very easy for everyone else to come up and have the same fee scale and not really deliver that value. It's the same sort of issue with private equity as well. I mean, there's some really great private equity operators here, but everyone else seems to charge very similar fees. So it's an industry where you're promising something in the future, but you're charging and agreeing to charge something now. The best hedge funds tend to be oversubscribed and can't get into them unless you work really hard and identify the relationships early. And all the others are unlikely to be worth it. So for us, is that the area we're going to spend most of our effort or do we think that we're going to create value in different ways? So I think they have a place, definitely. I think there's probably many that don't deserve to be there. For us, it's probably...”
2018-08-27 · Capital Allocators · Kristian Fok – Australia's CBUS Superannuation CIO (Capital Allocators, EP.66) · IDENTIFIED FROM THE TRANSCRIPT · source
“So we have, and I'm going to pursue a more of a systematic risk premium harvesting strategy, so I think that some of the elements of what their active strategies do provide diversification, but they could be replicated in a lower cost way There are some really smart and well resourced hedge fund managers that I would just die to have one tenth, one hundredth of the sort of resources and information that they have. And clearly that does give someone an edge. But the fees are so high relative to the returns.”
2018-08-27 · Capital Allocators · Kristian Fok – Australia's CBUS Superannuation CIO (Capital Allocators, EP.66) · IDENTIFIED FROM THE TRANSCRIPT · source
“Have a bit of flexibility to say, okay, well, look, we can actually invest in many different ways. It could be that they've got a physical asset in their business that they might want to expand but they don't want to do it on balance sheets. So we could do that in conjunction with them. And we think that by building those longer term relationships, that will give us investment opportunities, therefore opportunities to make returns or the better risk adjuster basis that I think is pretty hard for a fund manager to do.”
2018-08-27 · Capital Allocators · Kristian Fok – Australia's CBUS Superannuation CIO (Capital Allocators, EP.66) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, our intention is to have lower turnover. It won't be zero because there may be times that companies, they just get too expensive. So we are aware of evaluation. So one of our strategies that we're likely to introduce this year is to actually take more concentrated individual positions in some Australian listed companies with a view to not only just have those positions as an equity holder, but to look at whether we can be a provider of capital in other areas, so underwrite issuances or look at corporate debt. And you can only really do that if you, first of all, you have a good understanding of the business are willing to be a lot more patient and not moving in and out.”
2018-08-27 · Capital Allocators · Kristian Fok – Australia's CBUS Superannuation CIO (Capital Allocators, EP.66) · IDENTIFIED FROM THE TRANSCRIPT · source
“Purchasing more and more online and getting things delivered. So you can take that sort of property element and you can start to go, well actually, how does that make us think about the broader portfolio? There's a strong thematic in the way we look at these things and we do have to think beyond the immediate and try and understand what may or may not happen. You can't plan for everything because this may happen very differently but then you sort of go okay well what's the process in the management of the asset that will allow us to adjust the asset to the things that occur over the next five, ten years?”
2018-08-27 · Capital Allocators · Kristian Fok – Australia's CBUS Superannuation CIO (Capital Allocators, EP.66) · IDENTIFIED FROM THE TRANSCRIPT · source
“Means of transportation. When we think about property, it's interesting. It's what I like about these real assets, it actually gives you a bit of a window on some of the secular changes that are going on in society. So we look at our property developments in the residential space. We're now thinking about making sure we have three-phase power in the car parks because the lead time between the design and when people come in as like four years and then they expect to be there from over a decade, well, at that time horizon, I think cars and that will change quite materially. But other interesting things is that we have to think about the pumping systems for our property because higher incidents of flood and things like that, making sure that they're robust enough in the reception type areas we have to think about storage now because there's this huge trend where people are”
2018-08-27 · Capital Allocators · Kristian Fok – Australia's CBUS Superannuation CIO (Capital Allocators, EP.66) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, it depends on what it is, so property could be more than the life of a property could be you hold it, then you redevelop it. Infrastructure, it's often between 20 and 40 years. So you don't know what's going to happen in 20 years, but you start to think about what could disrupt an asset. We think about a toll road or something like that, we think about what's the impact of automation is there likely to be rail or other sort of alternative.”
2018-08-27 · Capital Allocators · Kristian Fok – Australia's CBUS Superannuation CIO (Capital Allocators, EP.66) · IDENTIFIED FROM THE TRANSCRIPT · source
“To be honest, my expectation is if I'm not able to deliver the outcomes but also the way that I deliver if it's inappropriate, then I expect that. CEO or the board will make a decision on whether I'm succeeding, they pay us. It may not seem like the same amount of money as fund managers, but they still pay us a lot of money, particularly when you think about what our members earn. So we have to manage the team in the same way, and people need to be accountable for outcomes.”
2018-08-27 · Capital Allocators · Kristian Fok – Australia's CBUS Superannuation CIO (Capital Allocators, EP.66) · IDENTIFIED FROM THE TRANSCRIPT · source
“Ultimately, we need to look at whether it's a skills issue, whether the strategies are all one, and in the same way that we do with fund managers, we will have to address that. And I think people understand that. They understand that a given time, but ultimately we're there to drive performance. And not everyone's sort of works out, so we have those discussions all in the way as well. But if you weren't willing to do that, then what are you sort of left with? It's really interesting. Trustee office. It's very easy to outsource because when anything goes wrong, And you can do that for a while until maybe a decade ago. But I don't know. I think if you're closer to things, I think you can react a little bit more nimbly.”
2018-08-27 · Capital Allocators · Kristian Fok – Australia's CBUS Superannuation CIO (Capital Allocators, EP.66) · IDENTIFIED FROM THE TRANSCRIPT · source
“And that forms some of our judgment around whether we feel comfortable allocating money. I think that's fair point if we think truly believe that the way we think about people and how we align them and how they work together adds value which we do, we apply the same sort of principles and we evaluate external fund managers.”
2018-08-27 · Capital Allocators · Kristian Fok – Australia's CBUS Superannuation CIO (Capital Allocators, EP.66) · IDENTIFIED FROM THE TRANSCRIPT · source
“A lot of them do. So part of what we've done is actually talk about how do you manage a pipeline of people and bring people through and create opportunity because they have risks, they have key person star risks that happen. So I wouldn't suggest that that is necessarily the case with everyone. Certainly fund managers that are very short term in terms of the way they think about people, we just don't think that their business model will sustain because People are not aligned to us, they're aligned to themselves, and it's likely that those people will be just attracted to move to another place anyway. When we evaluate managers, we do particularly smaller teams. We spend a fair bit of time analysing the team and the dynamics.”
2018-08-27 · Capital Allocators · Kristian Fok – Australia's CBUS Superannuation CIO (Capital Allocators, EP.66) · IDENTIFIED FROM THE TRANSCRIPT · source
“The best way you can engage them on people is to actually create some measurable things around their activities. So we have engagement scores based on surveys which are numbers and we use that as a way of talking about what's their management style. What are your team asking for? And then we put programs in place that they support, we make it clear that we're addressing these things and then you can see how the numbers change the next time around. And for those people, once they sort of see, well, actually, okay, I'm getting feedback early. I've got a mechanism to address it from a team point of view. I'm getting positive feedback back, but also I'm just seeing that the team's working better, a fundamental process that we've been trying to put in place, which is, again, all aligned with getting people to think about the team, not just about their individual self.”
2018-08-27 · Capital Allocators · Kristian Fok – Australia's CBUS Superannuation CIO (Capital Allocators, EP.66) · IDENTIFIED FROM THE TRANSCRIPT · source
“We've also got a legal team compliance and so forth. All the things that you need, all the different pieces that when they come together are required to make things happen. I've also got a strategy team in a sense it's not asset allocation but it's sort of people have got management consulting backgrounds that have sort of come in to say well how do we actually think about the team as a whole and bring together all these individual ideas into something that's quite coherent so we developed quite a comprehensive and annually update strategy document and this is not about thinking about investment markets this is thinking about well how are we going to position our team resources and effort over the next one two and three years and we get out all of our team leads involved and we get them all on the same page around that and again I think that's pretty important the interesting thing is for investment people like number”
2018-08-27 · Capital Allocators · Kristian Fok – Australia's CBUS Superannuation CIO (Capital Allocators, EP.66) · IDENTIFIED FROM THE TRANSCRIPT · source
“I've also got embedded team members around communications and media and so forth, which is important because if we want to pursue identifying and creating sourcing our own opportunities, you sort of need to make it known to everyone that this is what you're doing.”
2018-08-27 · Capital Allocators · Kristian Fok – Australia's CBUS Superannuation CIO (Capital Allocators, EP.66) · IDENTIFIED FROM THE TRANSCRIPT · source
“Ask this question What do I do? So often CIOs are sort of Pictured as the people that make the key investment decisions on different things. And I do get involved in a lot of that. Over the last two years, a lot of my time has been really around building an organisational structure, thinking about the people, building management capability within these technical team leaders. Because if you think about it, investing is all about the people you got there and the decisions that they make and how they can make those decisions in the best way. I'm lucky that within our structure we have sort of an embedded business partner in relation to people and culture.”
2018-08-27 · Capital Allocators · Kristian Fok – Australia's CBUS Superannuation CIO (Capital Allocators, EP.66) · IDENTIFIED FROM THE TRANSCRIPT · source
“A positive thing, but there are other aspects around what you offer beyond returns that also make a difference. So in our case, insurance is really important because our members are in a quite dangerous industry. And so we make sure we have insurance that covers those members, whereas often when you do group insurance, they exclude people that work in dangerous industries. So tailoring product is also quite important. And brand is really important too.”
2018-08-27 · Capital Allocators · Kristian Fok – Australia's CBUS Superannuation CIO (Capital Allocators, EP.66) · IDENTIFIED FROM THE TRANSCRIPT · source
“By default, if you don't actively choose, people can always leave you, or they can choose. So it's a contestable system, but with an underpinning that gives you the capacity to think a bit longer term. So that's quite an interesting mix because you've got enough assurance that you've got time to do some things, but there's always competitive tension that means that you can't just rest on your laurels. So there is a lot of discussion around returns. Fortunately, most reporting they look at five-year numbers, which is a good thing, rather than they show one and five years, but they try not to focus too much on the short term. I think that's...”
2018-08-27 · Capital Allocators · Kristian Fok – Australia's CBUS Superannuation CIO (Capital Allocators, EP.66) · IDENTIFIED FROM THE TRANSCRIPT · source
“There's a view that automatically there's a compromise, but actually we believe that particularly if you remove a lot of the intermediaries in between, if you can get closer to the opportunity, you don't have to have that compromise. So we're driven first and foremost by the return and the risk that we are increasingly looking at measuring other impacts of our investment decisions. So before there was primarily the environmental outcomes of our property development and the jobs that it created. But the sustainable development goals allow us to look at and think about those sort of framework across the broader part of the portfolio. When we look at opportunities, I think one of the things that's very unique about the Australian system is that although I talked about through the industrial process you can decide which fund contributions would go through.”
2018-08-27 · Capital Allocators · Kristian Fok – Australia's CBUS Superannuation CIO (Capital Allocators, EP.66) · IDENTIFIED FROM THE TRANSCRIPT · source
“First and foremost, it is return and risk, but we think that you don't have to compromise. It's really interesting. I was in the States actually last week with a lot of pension funds, and when you talk about either impact or the SDGs, for instance, which is all about looking at money, but sort of looking at societal needs as well.”
2018-08-27 · Capital Allocators · Kristian Fok – Australia's CBUS Superannuation CIO (Capital Allocators, EP.66) · IDENTIFIED FROM THE TRANSCRIPT · source
“The report pretty much said that the larger funds were the ones that were delivering, and they did custom benchmarks for their strategy, so it wasn't distorted too much by the risk and return positioning. But the broad conclusion was the bigger funds generally and the industry funds generally outperformed, the smaller funds didn't generally. For the self-managed funds, unless you had more than a quarter of a million, then you severely underperformed. Fortunately for us, we've delivered very strong returns over quite a long period of time. So CBUS property not only has generated those returns, but in the last eight years it's created 70,000 jobs in our own industry, which is a really interesting, it's this virtuous circle because we take our members superannuation money and then a portion of it goes back to creating assets that will generate returns for their retirement but at the same time generates new jobs.”
2018-08-27 · Capital Allocators · Kristian Fok – Australia's CBUS Superannuation CIO (Capital Allocators, EP.66) · IDENTIFIED FROM THE TRANSCRIPT · source
“It's interesting because we just had a productivity commission on the whole superannuation industry. So it's a report that was. Conducted on behalf of the government to look at it, and I think it's fair to sort of take a step back. And they did some analysis around the different parts of industry. So the main parts are industry funds, which is like us. So they're set up as mutuals pretty much. So we don't have to make a profit for our shareholders. It's cost recovery or profits, returns, go to the members. And there's the retail funds, which are owned by banks. They do need to make a profit along the way, but they're very big too, or some of them are quite big. They've got strong distribution through the banking network. And then there's what we call small self-managed super funds, which people with larger balances, the accountants will say you can stop your own fund to do it yourself.”
2018-08-27 · Capital Allocators · Kristian Fok – Australia's CBUS Superannuation CIO (Capital Allocators, EP.66) · IDENTIFIED FROM THE TRANSCRIPT · source
“It's about 5%. With the capacity to grow, assuming that there's the credit cycle changes around, it's always determined by the opportunity set, the price of the risk. The other area is infrastructure. About half of that portfolio is international, half of its domestic. That's partially because in Australia it's actually quite a conducive environment for investors to look at new infrastructure opportunities. Property at the moment is almost all domestic. It's unusual that that's the case because we just have this advantage that we can create product whereas most pension funds here, the product constraints so they have to go overseas. We do have a small allocation overseas though. So, I think, generally speaking, it'd be probably about 40% of the portfolio is still domestically focused.”
2018-08-27 · Capital Allocators · Kristian Fok – Australia's CBUS Superannuation CIO (Capital Allocators, EP.66) · IDENTIFIED FROM THE TRANSCRIPT · source
“So we got about a quarter of the portfolio, which is Aussie equities, so it's still quite a high bias to Aussie equities. So cash, we've got a higher level of cash at the moment, so there's 10% in cash. Fixed income would be half and half. It's a smaller level of fixed income at the moment, so it's probably. Only a couple of percent there. Credit's about half of the credit portfolio was domestic, the other half is international.”
2018-08-27 · Capital Allocators · Kristian Fok – Australia's CBUS Superannuation CIO (Capital Allocators, EP.66) · IDENTIFIED FROM THE TRANSCRIPT · source
“I don't know. In the Australian market, there's like 100 people trying to sell Aussie equities. I mean, for instance, our global team actually came from a family office investing in the same strategy. So the time horizon was very similar. But the feedback I got was, well, they sort of got a bit tired making billionaires richer. Actually liked the idea of making ordinary Australians richer. So people sort of moved for those reasons as well. We've got a lot of money and that they can have the opportunity to invest and it's growing. And we do try to make sure that we need anything, whether it's information travel to succeed, that we make sure that we don't deny that. So we find that that's all really important.”
2018-08-27 · Capital Allocators · Kristian Fok – Australia's CBUS Superannuation CIO (Capital Allocators, EP.66) · IDENTIFIED FROM THE TRANSCRIPT · source
“My feeling is that over time we're going to have to keep looking at remuneration. Adjusting for that, that's the reality that I think most people are coming in along those lines as well. They come in, establish something, prove themselves. I think also they get satisfaction from other aspects of the job as well. So that's been a pretty important part of it. And I think certainly we've got over 100 Aussie equities managers, for instance. There's just way too many for our market. So the smart people sort of see consolidation is happening.”
2018-08-27 · Capital Allocators · Kristian Fok – Australia's CBUS Superannuation CIO (Capital Allocators, EP.66) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, for us, I think the whole concept of internalization has been sort of interesting because we've had to think about how we pay people differently. We've had the introduction of variable pay to a small... Number of staff, we keep it fairly modest compared to the industry standards, so the amount of at risk or opportunity is not what you would sort of see in a typical asset management business, but it's there. So I think that's an important thing. I think people are coming because they get a sense they can really build something unique. Only early stages, it hasn't been too bad, particularly as we have hired credible people. So when they see people coming along, it makes it easier. They go, okay, well, clearly they've got all the things around that allow those people to come and do their job”
2018-08-27 · Capital Allocators · Kristian Fok – Australia's CBUS Superannuation CIO (Capital Allocators, EP.66) · IDENTIFIED FROM THE TRANSCRIPT · source
“Decarbonization. We think there's a big opportunity to look at the construction industry. There's a huge role that can be played around new innovative construction design. We also are aware that there's a, I suppose, a disruption to the industry that's happening through technological change and so forth. So we think we're just playing around with the idea of, well, maybe in the same way that we could use our networks to build a very successful property development company. Take the same approach and work with other corporations in the industry to support a bit more innovation, which would then mean that we need to bring in some private equity type skills into the team. So I think if we were to do it, it would be selective and it would be in an area where I think we could demonstrate a competitive advantage”
2018-08-27 · Capital Allocators · Kristian Fok – Australia's CBUS Superannuation CIO (Capital Allocators, EP.66) · IDENTIFIED FROM THE TRANSCRIPT · source
“So we have a funder funds program that was entered into a long time ago and frankly that just doesn't work for us. So we've got a legacy portfolio there that we're just sort of working through. In Australia, it's a small market for high quality private equity managers, so you can sort of know who's around there. And also the advisor sources transactions. So that's been the model to date. We've been sort of thinking about as you become more involved in the market, new things start to come to you. So we're starting to see direct opportunities coming to us that are not really infrastructure. They're more private equity, but we'd like to hold it longer than a private equity time horizon. So we're putting our mind a bit towards that. The other thing that we're sort of thinking about is in relation to finding opportunities to invest in the...”
2018-08-27 · Capital Allocators · Kristian Fok – Australia's CBUS Superannuation CIO (Capital Allocators, EP.66) · IDENTIFIED FROM THE TRANSCRIPT · source
“It has been in the traditional way, so we have an asset consultant and advisors, but we also have our own internal team, and the internal team is probably taking a greater responsibility with that. We probably are increasingly looking at managers that can do something more with us. So the example of the alternative beta is one of them. We've compared internally managing or working with a fund manager on this. And actually the proposition from the fund manager competes very well with internal management. So we'll go with the fund manager, that instance, because we'll be able to combine our IP with theirs. So for us, I think it's either they've got something quite unique, because we can't do everything and we'll pay for good quality managers, or they're willing to work with us in a different way, and we think that that's very attractive. Or if it's a space where we think that we can do it ourselves.”
2018-08-27 · Capital Allocators · Kristian Fok – Australia's CBUS Superannuation CIO (Capital Allocators, EP.66) · IDENTIFIED FROM THE TRANSCRIPT · source
“Take our IP and their IP and combine it. So those things will be implemented this financial year, so the next 12 months. And that should bring our internal management up to about 20%. We think ultimately over the next three to four years it'll probably go up to 35 or 40%.”
2018-08-27 · Capital Allocators · Kristian Fok – Australia's CBUS Superannuation CIO (Capital Allocators, EP.66) · IDENTIFIED FROM THE TRANSCRIPT · source
“So at the moment it's only just 10 to 12% now. There's a number of strategies to be funded. So we have a debt lending strategy which, depending on the attractiveness of opportunity, is in the pipeline will take a few years to ramp up. We have a small caps team that's come on board that will be allocated money. This is in Aussie equities. There'll be another Aussie equity strategy where we take longer term positions in companies, sort of hold and try to build broader relationships with them, which we think is an interesting one. And we've got a few other strategies around alternative beta that we're doing some work with. So we've got a quant team, but we're looking at working with an external manager where we can”
2018-08-27 · Capital Allocators · Kristian Fok – Australia's CBUS Superannuation CIO (Capital Allocators, EP.66) · IDENTIFIED FROM THE TRANSCRIPT · source
“So there's macroeconomic input, there's valuation, and that's tricky because it's both relative to history, but of course I think almost everything seems relatively expensive to history, but it's also relative to each other. And so that sort of gives us a sense of where would you want to be in one or the other. And then the question of how much risk do you want to take is sort of informed by macroeconomic cycles and broader valuation relative to history.”
2018-08-27 · Capital Allocators · Kristian Fok – Australia's CBUS Superannuation CIO (Capital Allocators, EP.66) · IDENTIFIED FROM THE TRANSCRIPT · source
“We used to have a long term portfolio, but it was sort of like so long that it didn't capture EDM trends. So now we have a reference portfolio. And it's designed to take into account particular sort of aspect of the cycles. So for instance, that we're in a very low interest rate part of the cycle is likely to be some interest rate rises at some point in time. So it doesn't form a view about when, but it is sort of in the five-year type horizon. So that is discussed and agreed by the investment committee. And then we've got delegations around that to deviate across. And then the way we think about deviating is based on asset class considerations, but also we're informed by some of these scenarios as well.”
2018-08-27 · Capital Allocators · Kristian Fok – Australia's CBUS Superannuation CIO (Capital Allocators, EP.66) · IDENTIFIED FROM THE TRANSCRIPT · source
“Those scenarios have to come off of like a neutral portfolio. So before you start running it, how do you figure out what you want that neutral portfolio to be before you start tweaking it because of different scenarios?”
2018-08-27 · Capital Allocators · Kristian Fok – Australia's CBUS Superannuation CIO (Capital Allocators, EP.66) · IDENTIFIED FROM THE TRANSCRIPT · source
“Had a very strong property in housing market, and what's the impact of different moves that would slow that or create a correction there? Then you've still got to go work out, is it based on interest rates rising in response to inflation or do they rise too early? Then you look at which assets are going to be positively in one circumstance if they're inflation protected, they're probably okay. We use scenario analysis to sort of go through those different things and then we sort of try to look across the portfolio and say which assets are likely to be either positively or negatively affected.”
2018-08-27 · Capital Allocators · Kristian Fok – Australia's CBUS Superannuation CIO (Capital Allocators, EP.66) · IDENTIFIED FROM THE TRANSCRIPT · source
“We have the asset classes, but we also think about defensive and return seeking time. We even think about from a defensive point of view about what's the effectiveness of the defensiveness. So for instance cash, cost is not really a cost, but it's a low return, but it's defensiveness. It's probably not that strong. We think about currency in the same way. We think about options and fixed income also. Same thing around credit. So we sort of look at that. And it's based on different scenarios. So we might say, well, what's the sort of scenario that might lead to a downturn? So is it related to the global economic thematics? So, for instance, the US being in the late growth cycle at some point in time there being sort of we get back eventually to some kind of normal economic cycle reduction. What does that mean? How does it sort of flow across all the asset classes? Or in Australia it might be housing market, for instance. So we've”
2018-08-27 · Capital Allocators · Kristian Fok – Australia's CBUS Superannuation CIO (Capital Allocators, EP.66) · IDENTIFIED FROM THE TRANSCRIPT · source
“And quite often, what you do is you pay an investment bank to actually take those opportunities and to structure it and split it out, and then you go ahead and you buy the individual pieces and put it back together again. But the flip side is unless you've got an investment bank doing that or you've got some mechanism to think about a portfolio that removes those barriers, then those opportunities don't get pursued.”
2018-08-27 · Capital Allocators · Kristian Fok – Australia's CBUS Superannuation CIO (Capital Allocators, EP.66) · IDENTIFIED FROM THE TRANSCRIPT · source
“This is interesting because we still have quite a traditional approach around looking at asset classes. Gets sinking across as asset classes is going to be a really important contributor to value. And it's a bit of a challenge because when you bring people in and you delegate it authority to make decisions, so you've got attribution. And attribution is traditionally based on asset class returns. We feel that either opportunities or even understandings around what could drive a portfolio could be just as well being driven by a thematic or an asset opportunity that just doesn't fit cleanly in one space. So one of the things that we're quite conscious of is there's actually a really interesting interplay between say property development and infrastructure. There are many examples of infrastructure assets that interface with property.”
2018-08-27 · Capital Allocators · Kristian Fok – Australia's CBUS Superannuation CIO (Capital Allocators, EP.66) · IDENTIFIED FROM THE TRANSCRIPT · source
“And I think for people, they're quite proud of the fact that if they find an investment opportunity that actually either creates jobs or creates some benefit, I think they like that. They'd like the freedom that that sort of gives rather than just saying, look, I'm only focused on this month's return. And that longer-term horizon as well is very important because, again, people feel confident they can take a position and they've got enough time to allow it to play out. So I think it's all those sort of things.”
2018-08-27 · Capital Allocators · Kristian Fok – Australia's CBUS Superannuation CIO (Capital Allocators, EP.66) · IDENTIFIED FROM THE TRANSCRIPT · source