Murray Brewer finally departed T. Rowe Price last Friday (August 28), having established the global manager’s presence in Australia 14 years ago. His resignation period was a long one – first announced late last year. But now comes the good part: he will be holidaying as much as possible and then considering his options, at age 54.
He said in an interview this month (on August 19), together with his successor, Darren Hall, that he started thinking about doing something new a couple of years ago. This is common for senior executives of that age. They believe that they have only “one more big challenge” in their careers. In a few years’ time, they may be too old, they think. Whether or not that’s true, Murray is not alone in wanting to take time out and re-calibrate his working life. He has seen a lot of changes during his 14 years at T. Rowe, both in the company’s presence in Australia and New Zealand and in the broader investment industry, as well as during his 18 years in the industry prior to that.
As director and head of distribution for Australia and New Zealand, and the founder of the Sydney office, Brewer performed a range of executive tasks, reporting direct to Baltimore head office and taking on the role normally ascribed to a ‘country head’. Randal Jenneke, head of Australian equities, joined in 2010 to launch the Aussie equities funds and strategies, which now account for about $1.5 billion. Brewer tapped him to set up that part of the business after persuading Baltimore on the proposition. The firm’s Aussie equities SMA and unit trust offering were awarded a ‘highly recommended’ rating by Lonsec early in August. Darren Hall was the head of intermediary and, in effect, Murray’s deputy. Brewer had worked with Brian Delaney at AMP Capital from 1995 and then left in 2000 to take over the sales role formerly held by Stephen O’Brien and the late Adam Coughlan at Schroders. Both jobs were great experiences, he says. But the launch of T. Rowe Price in Australia, in 2006, has been the highlight to date.
Brewer analyses his options as: “I could do the same thing again, I could do a similar thing with a boutique that interests me, I could start my own business, such as in third-party marketing, or I could have a portfolio of business interests.” Just playing golf a lot for the next 20-25 years was not an option, he said. “I am also thinking about what it doesn’t look like. And it doesn’t look like doing the same thing again… Having more flexibility in what I do appeals to me.”
Funds management can be a volatile profession. For instance, within his first few weeks at Schroders, the firm lost more than half of its $2 billion in funds under management following a redemption by a big European client. “We didn’t have any option but to dig ourselves out,” Brewer says. “We went hard to get it back and more… We didn’t have many people nor much of a budget. I focused on multi-managers and platforms. We were very successful in Australian equities and grew to about $12.5 billion in the next five years.”
The move from Schroders to the new role at T. Rowe was fairly lengthy but interesting too. Stephen van Eyk, the co-founder of van Eyk Research, which was the most influential wholesale ratings firm at the time, had recommended to people at Challenger that they should look at T. Rowe as a distribution option. Coincidentally, Les Fallick, who had also previously had a senior position at AMP Capital, was a member of T. Rowe’s global advisory board and introduced Brewer to the firm in 2005, when, he says, he had no intention of leaving Schroders. They flew out to Sydney the next year, having started a recruitment process using a global recruiter, met with him and then flew him to Baltimore, where he had 25 meetings in three days. At that point, he was unsure who was interviewing whom.
“I was really impressed with their culture,” Brewer says. “I met with Bill Stromberg (now T. Rowe chief executive) and I thought, after that meeting, I couldn’t go back to Schroders. The culture then, as is now, was to ‘do the right thing’ and take a long view… I started in July 2006. Our first trust was seeded by van Eyk Research clients in September, after the research firm had given the manager an AA rating.”
Brewer recruited Darren Hall, who takes over the top business role in Sydney today (August 31) in 2007. He had also worked with Murray at Schroders. The T. Rowe Australasian business of which Hall is now in charge, accounts for about $16 billion in locally sourced assets. New Zealand makes up about $1 billion of that. The firm’s two global equities strategies, one more concentrated than the other, account for about 65 per cent of the assets. The broader strategy, with 140-150 stocks in the portfolio, has been a top performer in terms of inflows, as well as returns, for the past seven years.
From a business perspective, Brewer says, T. Rowe left the strategy and product focus to the local players, which is unusual for US-based managers. Another good thing about the firm is it “doesn’t sweat the small stuff”. They encourage their associates to travel, for instance. They have an office in Melbourne and a single-person office in Perth. There are 44 staff in Australia in total. “We’ve just added another person to our investment team. The business has grown and continues to grow more complex,” he says. In terms of the industry as a whole, Brewer says that the big changes over the past 14-or-more years, include:
. Funds are getting bigger and bigger
. The role of the asset consultants has changed as they get more specialised
. The large funds are leaning on managers to provide more in their mandates for less in fees
. Managers have to try to understand what their role is going forward. “Our conversations with clients are getting much bigger and involving insights on member engagement”, Brewer said, and…
. Retirement income streams represent a brand-new conversation.
Greg Bright is publisher of Investor Strategy News (Australia)