Former Future Fund Chief Investment Strategist Stephen Gilmore has had a career that is both impressive and dramatic, dealing with warlords in Tajikistan, working at AIG during its bail out and finally at Australia’s sovereign wealth fund, the Future Fund. MarketFox columnist Daniel Grioli asks for his insights.
Overview of Stephen Gilmore Podcast:
2:20 You started your career in academia, why did you leave?
4:00 A one way ticket out of New Zealand
5:00 Working for the IMF after the Soviet Union broke up
8:00 On to Tajikistan
11:30 Surrounded by warlords
14:00 Inflation at 2000%
15:00 Moving to Morgan Stanley, dealing with the Russian bonds defaulting
19:00 The investment process needs to be collaborative. You don’t know who has got the right information.
20:00 Working at AIG when it needed to be bailed out
27:00 The bailout ended up making a lot of money for the US Fed
30:30 Some of my colleagues received death threats and had to go into hiding
31:50 Did reliance on quantitative techniques add to troubles for AIG?
34:30 Joining the Future Fund. After the AIG experience it was important to have a role with some meaning
38:30 Keith Ambachtsheer said the Future Fund is missing out on not internalising asset management. What do you think?
40:00 What is important is that you don’t pay fees for things that are easy to do.
42:00 Should the Future Fund manage all of Australians’ superannuation money?
44:00 Future Fund’s cash holdings
46:45 The benefits of a total portfolio approach
48:00 The challenges of this approach: everyone thinks differently
57:00 Bottom-up in addition to top down approach
1:02:25 The flipside of scale; sometimes you are just too large to take advantage
1:06:00 Where to now for Stephen Gilmore?
1:07:00 Lessons learned and tips