Sue Brake's guest appearances

Sue Brake

[i3] Institutional Investment Podcast

Euromoney Podcasts

Jason Zweig

Jack Bogle

Rob Arnott

Corey Hoffstein

Tobias Carlisle

Michael Recce

Fred Schebesta

Bill Mitchell

Jeremy Grantham

Ned Davis

Brian Singer

Michael Kelly

Benjamin Graham

Tadas Viskanta

Andrew Fisher

OwlTail

Sue Brake is the Chief Investment Officer of the Future Fund. In this episode, we talk about the fund's 15 year celebration, looking at the early days of how the fund started to invest just as the global financial crisis began to impact markets. We also discuss the recent investment strategy review and look at the years ahead. Please enjoy the show!To access the book 'Celebrating 15 Years of the Future Fund', which includes interviews with Raphael Arndt, Peter Costello, David Murray, David Neal and David Gonski, please see here: https://15years.futurefund.gov.au/Overview of Podcast with Sue Brake, CIO of the Future Fund1:00 Celebrating 15 Years of the Future Fund3:00 On the bravery not to invest in the early days, when the pressure was there to chase the market4:00 You can’t time the markets, but you can pause and try to understand what is going on in the market 5:30 The fund is required to achieve its investment target without taking excessive risk. What is ‘excessive risk’?6:30 What the founders did extremely well is to put the mandate at the centre of decision making.8:00 During the pandemic drawdown, we made over 30 decisions of $1 billion or more.10:30 Leading up to the pandemic, we had discussion whether the Australian dollar wasn’t as pro-cyclical anymore as it had been in the past.13:00 I thought I had the total portfolio approach nailed and understood the Future Fund way15:30 Building a future fund academy: “We are no longer small enough that you can get by on word of mouth; it needs a bit more formality and structure”.18:00 There is an ownership of the portfolio by everyone, rather than a culture of defending your patch20:00 I used to think being mandated to use external managers was a terrible idea, but I’ve flipped on that [opinion] completely.21:30 We take fees incredibly seriously, but we are not silly about that.23:30 The way we think about partnerships is specialisation 24:30 The good managers get to choose who they partner with, because capital is just more plentiful26:00 Looking back at the beginning, the Future Fund deployed most of its capital during the financial crisis. Was it a lucky break that the fund got to enter the market in a downturn? “It could have been a disaster.”28:00 The Future Fund has stuck with an equity allocation of 30 - 40 per cent during its 15 years of investing. What is the philosophy behind that?29:30 Apart from a large allocation to private markets, we’ve had more currency exposure [than a typical super fund]32:00 Strategic review – it is always hard to say: ‘we are going to take structurally more risk’, when there has been a ramp up in risky assets.33:30 Where are you looking for more risk exposure?35:00 When we looked at how big the fund had become, it became clear that this much liquidity wasn’t the best use of capital37:30 The strategic review concludes that bonds have lost some of their defensive qualities. Are government bonds toast?40:00 The defensiveness of the portfolio comes from our hedge funds, currency positions, some aspects of emerging markets that are less correlated [not so much government bonds].41:00 What changes do you expect when the fund goes into withdrawal mode?

Sue Brake is the Chief Investment Officer of the Future Fund. In this episode, we talk about the fund's 15 year celebration, looking at the early days of how the fund started to invest just as the global financial crisis began to impact markets. We also discuss the recent investment strategy review and look at the years ahead. Please enjoy the show! To access the book 'Celebrating 15 Years of the Future Fund', which includes interviews with Raphael Arndt, Peter Costello, David Murray, David Neal and David Gonski, please see here: <a href="https://15years.futurefund.gov.au/" rel="nofollow" target="_blank">https://15years.futurefund.gov.au/</a> Overview of Podcast with Sue Brake, CIO of the Future Fund 1:00 Celebrating 15 Years of the Future Fund 3:00 On the bravery not to invest in the early days, when the pressure was there to chase the market 4:00 You can’t time the markets, but you can pause and try to understand what is going on in the market 5:30 The fund is required to achieve its investment target without taking excessive risk. What is ‘excessive risk’? 6:30 What the founders did extremely well is to put the mandate at the centre of decision making. 8:00 During the pandemic drawdown, we made over 30 decisions of $1 billion or more. 10:30 Leading up to the pandemic, we had discussion whether the Australian dollar wasn’t as pro-cyclical anymore as it had been in the past. 13:00 I thought I had the total portfolio approach nailed and understood the Future Fund way 15:30 Building a future fund academy: “We are no longer small enough that you can get by on word of mouth; it needs a bit more formality and structure”. 18:00 There is an ownership of the portfolio by everyone, rather than a culture of defending your patch 20:00 I used to think being mandated to use external managers was a terrible idea, but I’ve flipped on that [opinion] completely. 21:30 We take fees incredibly seriously, but we are not silly about that. 23:30 The way we think about partnerships is specialisation 24:30 The good managers get to choose who they partner with, because capital is just more plentiful 26:00 Looking back at the beginning, the Future Fund deployed most of its capital during the financial crisis. Was it a lucky break that the fund got to enter the market in a downturn? “It could have been a disaster.” 28:00 The Future Fund has stuck with an equity allocation of 30 - 40 per cent during its 15 years of investing. What is the philosophy behind that? 29:30 Apart from a large allocation to private markets, we’ve had more currency exposure [than a typical super fund] 32:00 Strategic review – it is always hard to say: ‘we are going to take structurally more risk’, when there has been a ramp up in risky assets. 33:30 Where are you looking for more risk exposure? 35:00 When we looked at how big the fund had become, it became clear that this much liquidity wasn’t the best use of capital 37:30 The strategic review concludes that bonds have lost some of their defensive qualities. Are government bonds toast? 40:00 The defensiveness of the portfolio comes from our hedge funds, currency positions, some aspects of emerging markets that are less correlated [not so much government bonds]. 41:00 What changes do you expect when the fund goes into withdrawal mode?

68: Future Fund's Sue Brake – 15 Years of the Future Fund

In this podcast, MarketFox columnist Daniel Grioli speaks with Sue Brake, Senior Investment Consultant for Willis Towers Watson, about the importance of governance in asset management and the real cost associated with bad governance. Daniel also manages to get Sue to play a game in which he asks her to respond to quotes by David Swensen, CIO of Yale, about asset consultants.Overview of podcast with Sue Brake2:00 Changing careers, from banking to investing3:30 Banking is about implementing smart mathematical solutions, while investing is about effective decision making5:00 Executive retreat told me that there is no winning8:00 Embrace the mess; there is no straight line to becoming a president or CEO9:30 The longer you are in the market, the more you realise that humility is good.10:10 Failure is result of process not people11:30 Being smart doesn’t get you the whole way, you have to be curious and humble12:00 Founding my own gourmet food company14:00 Fortuitously I sold the company in 200716:00 Working at New Zealand Super22:00 The reference portfolio is a governance tool25:00 Simple reference portfolio beats most Australian pension funds26:00 The reference portfolio can show you the difference between good governance and poor governance27:30 Why does currency matters?29:00 You have periods where currency fluctuations really can make or break you.31:00 Is being far away from financial centres a positive or a negative?34:30 Working at the IMF38:00 What aspect of investing are universal?39:00 Boards are like the Little River Band: there are no original members40:00 Organisational efficiency42:00 Investment cultures that have a competitive edge44:00 Putting a price on governance45:30 Less than 2 per cent of pension funds get the AAA rating for governance46:00 The 12 factors of good governance47:00 ADD LINK OF CLARK AND URWIN PAPER ON 12 FACTORS50:00 Changing nature of asset consultancy53:00 Are asset consultants gatekeeper?54:00 Does the ownership of a consultant matter?56:00 Do consultants need more skin in the game?58:00 David Swenson says, Sue Brake answers

In this podcast, MarketFox columnist Daniel Grioli speaks with Sue Brake, Senior Investment Consultant for Willis Towers Watson, about the importance of governance in asset management and the real cost associated with bad governance. Daniel also manages to get Sue to play a game in which he asks her to respond to quotes by David Swensen, CIO of Yale, about asset consultants. Overview of podcast with Sue Brake 2:00 Changing careers, from banking to investing 3:30 Banking is about implementing smart mathematical solutions, while investing is about effective decision making 5:00 Executive retreat told me that there is no winning 8:00 Embrace the mess; there is no straight line to becoming a president or CEO 9:30 The longer you are in the market, the more you realise that humility is good. 10:10 Failure is result of process not people 11:30 Being smart doesn’t get you the whole way, you have to be curious and humble 12:00 Founding my own gourmet food company 14:00 Fortuitously I sold the company in 2007 16:00 Working at New Zealand Super 22:00 The reference portfolio is a governance tool 25:00 Simple reference portfolio beats most Australian pension funds 26:00 The reference portfolio can show you the difference between good governance and poor governance 27:30 Why does currency matters? 29:00 You have periods where currency fluctuations really can make or break you. 31:00 Is being far away from financial centres a positive or a negative? 34:30 Working at the IMF 38:00 What aspect of investing are universal? 39:00 Boards are like the Little River Band: there are no original members 40:00 Organisational efficiency 42:00 Investment cultures that have a competitive edge 44:00 Putting a price on governance 45:30 Less than 2 per cent of pension funds get the AAA rating for governance 46:00 The 12 factors of good governance 47:00 ADD LINK OF CLARK AND URWIN PAPER ON 12 FACTORS 50:00 Changing nature of asset consultancy 53:00 Are asset consultants gatekeeper? 54:00 Does the ownership of a consultant matter? 56:00 Do consultants need more skin in the game? 58:00 David Swenson says, Sue Brake answers

17: Willis Towers Watson's Sue Brake - Governance and the Real Cost of Poor Culture