Episode 18: Rob Prugue

Internalisation, Outsourcing and Mental Health

Rob Prugue is probably known best for his 15 years at the helm of the Asia-Pacific business of fund manager Lazard Asset Management. A role he left at the beginning of this year to ‘hang up his boots’, as he called it.

Before Rob joined Lazard, he spent time at pension fund SAS Trustees amongst other roles and at this pension fund he was part of the internal investment team.

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He witnessed first hand how the pension fund decided to outsource its asset management functions as it felt it was doubling up on risk. Considering that many Australian pension funds are now moving towards in-house management Rob has a unique view on this trend.

We will also speak about Rob’s efforts in reducing the stigma around mental health. He is the founder of People Reaching out to People, or PROP, which has set up a short educational program that gives free guidance on how to interact with people who have potentially suicidal thoughts. For more information, please visit:


4:00 Taking a sabbatical trip and volunteering in an elephant sanctuary
5:00 Starting in the investment industry
8:00 A government job will through you in the deep end much quicker than Wall Street
9:00 Joining 3 months before the ‘87 crash was a great entry
11:00 Crisis times is when only the big boys play
13:30 The reality of investment is that information is asymmetrical
15:00 I’m the poster child of internalisation
16:00 SAS Trustee’s decision to get out of in-house asset management
18:00 The cost savings from internalisation, while valid, is also an agency risk
21:00 Internalisation might solve some capacity problems, but introduces a range of other risks
21:45 There is no such thing as passive; you’ve made an active decision
24:00 How do you deal with the people aspect of internalisation? Firing teams can be tougher than terminating a mandate
25:00 Not once have I come across a statue of a fund manager
26:00 You want a manager that has been bloodied three times
27:00 Buying into Flight Centre
29:00 Building the Asian business of Lazard
31:00 Should you never internalise?
31:00 Industry fund no longer exist; they are mutuals
36:00 Longevity insurance
38:00 Suicide awareness and People Reaching out to People (PROP) https://prop.org.au/
45:50 Be aware of the difference between empathy and sympathy
48:00 Emotional intelligence and mental health
50:00 Is the hyper-masculinity of the investment industry exacerbating mental health issue?
53:00 The PROP educational series

About the [i3] Podcast

The [i3] Podcast is a conversation with some of the leading institutional investors around the world, discussing their philosophy towards investing, in particular towards portfolio construction and investment strategy. The [i3] podcast is available on iTunes, Google Podcast, Spotify, Stitcher or your favourite podcast platform.