John Livanas is the Chief Executive Officer of State Super, the $37 billion superannuation fund for public service and public sector workers in NSW. In this episode, we talk about the use of defensive overlays, dealing with the COVID drawdown and machine learning in investments. Enjoy the show!
Overview of podcast with John Livanas, Chief Executive Officer of State Super
01:30 Peter Drucker’s book, The Unseen Revolution, provided inspiration to enter the pension fund industry
03:00 We are actually starting to see some of the benefits that Drucker described eventuate here in Australia
07:30 In Australia, every member can actually see their own money in their account. That relationship where you can see where your money is going and see the wealth accumulating creates a more stable system
10:00 On individual risk and financial literacy
12:00 The unique characteristics of State Super
15:00 State Super is unusual; it is probably where most of the funds will be in 10 years’ time.
16:00 We think the biggest decision is setting the investment strategy and then our internal team or TCorp will implement that
18:00 In 2017, we were called the biggest hedge fund in Australia, because we made money on the upside and the downside
19:30 During COVID, our downside protection triggered and that meant we never got into the negative. It is not about anticipating what will happen, but think about how these factors will take place
22:00 Using machine learning in the investment process
24:00 Machine learning didn’t work as well for the Ukraine invasion. That was more a secular relationship. But we did change our portfolio quite significantly
31:00 Machine learning will have a role, but I will still look to people to make the decision
35:00 State Super is not regulated by APRA, but often we look at the policies as if we were
37:00 Active manager do take a little while for that outperformance to come through
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[i3] Insights is the official educational bulletin of the Investment Innovation Institute [i3]. It covers major trends and innovations in institutional investing, providing independent and thought-provoking content about pension funds, insurance companies and sovereign wealth funds across the globe. The [i3] podcast is available on Apple Podcast, Spotify, Amazon Music, YouTube Music, or your favourite podcast platform.