NSW Treasury Corporation, the $70 billion investment fund managing the State’s largest pool of fiduciary money, has spilled several of its most senior positions, including that of CIO, and appointed a recruitment firm to advise on staffing under a proposed restructure.
David Deverall, who became chief executive early this year after the retirement of Steve Knight, confirmed the proposed restructure and executive spill last week. He said the restructure would set the organisation up to attract other parts of the NSW’s Government coffers to manage.
“When I suggested to the board the strategy for T-Corp, I wanted us to be seen as a best-in-class service for all NSW Government clients,” he said last week. “So, three weeks ago, I kicked off the process to create a new structure with a single CIO for the business responsible for investment returns.”
The four main roles on which the recruitment firm, Carmichael Fisher, will advise are: CIO, through the amalgam of the current head of investments, held by Mark O’Brien, and the head of investment and client strategy, held by Steve McKenna; a new role as general manager of client relationships; the current role of chief risk officer, held by Mark Swan; and that managing the traditional part of the old T-Corp’s business in financial markets of funding and hedging strategies.
Mike Allen’s senior role, of general manager of clients and services, which has been primarily to liaise with Treasury and oversee non-investment operations, will go.
The new T-Corp came about through the merger of the investment functions of T-Corp, the big defined benefit fund NSW State Super (STC), and the former Workcover insurance fund (now known as ‘icare’). The aim is to improve both scale and efficiencies, while the boards of the original entities remain intact to oversee asset allocation and other top-level functions.
In the crucial hands-on investment roles, Mark O’Brien was the former CIO of STC, while Steve McKenna was the CIO of Workcover.
Not included in the spill is the currently important role of head of investment operations and facilities, held by long-term T-Corp manager Jonathan Green. He is running a review process for the combined investment pool’s securities servicing arrangements, including custody. It is the country’s largest-ever custody tender which is understood to still have four custodians in the race: incumbents to each of the three underlying funds, State Street, BNP Paribas and JP Morgan, and newcomer Northern Trust. Adviser on this is Mercer Sentinel.
The Carmichael Fisher executive in charge of the personnel advice for T-Corp, Sebastian Cohen, did not respond to a request for further information last week. The search for each position will include both internal and external candidates.
Deverall, a former managing director of Perpetual and, more recently, Hunter Hall, said the restructure was not about saving money. “What we’re trying to do is use economies of scope to offer our clients a high quality range of service and to use our economies of scale in our purchasing.”
He said: “With the amalgamation, T-Corp went from having about 10 investment staff to 50. We now have competencies from listed equities and bonds to infrastructure, property and more exotic investments. We also want to get the attention of other parts of government to run more investment money.”
* Greg Bright is publisher of Investor Strategy News (Australia)