For most of us, going through the global financial crisis just a couple of months after taking on the role of inaugural Chief Investment Officer (CIO) of a super fund would likely be considered a case of particularly bad timing.

Not so for Andrew Spence, who believes his joining Qantas Super as the fund’s first CIO in July 2008 came at the perfect time.

“I actually think I was fortunate to join then and be able to rebuild against the backdrop of the GFC, because that’s where our safety-first approach came from. I think that enabled us to really build something with our members’ needs and risk profile in mind,” Andrew explained.

The job was sure to be a challenging one even before the GFC. Prior to Andrew joining Qantas Super, the responsibility of overseeing the fund’s investments was that of the managing director, before the decision was made to split out the functions and create the two separate roles of CEO and CIO.

For Andrew, the chance to join the fund and lead the build of its new investment program, which up to that point had been managed largely based on external investment consulting advice, was the perfect opportunity. Having spent 20 years working in a variety of investment management roles in the UK and Australia, as well as three years in an investment consulting role in Australia, Andrew said the role at Qantas Super offered the perfect blend of responsibilities.

According to Andrew, a core focus in the early days was applying a risk lens to the investment function, implementing more discipline and structure as the internal team was built out.

As part of this, the Board’s Investment Committee worked to put in place a set of investment delegations to enable greater decision-making autonomy for the CIO.

“These delegations empowered us, while also ensuring there were sufficient guardrails in place that, from a governance perspective, meant the Investment Committee could hold us to account. It sounds very obvious, because that’s exactly how the investment management world works, but it wasn’t how the superannuation industry worked at the time,” Andrew explained.

As he began building out Qantas Super’s internal investment capability, the first addition to the team was a manager of investment operations.

“I could see that, in order to craft a sophisticated investment program, we would need a very strong operational base,” Andrew explained. “It’s like building a structure: you can envisage an amazing building but if you don’t build a solid foundation, the building will eventually collapse in a period of stress.”

While the team has grown over the years, it has always remained relatively small.

“Resources are always going to be scarce, but I quite like that, because it means that you’re forced to prioritise and make the decisions that you think will make the most difference to the investment outcomes of members,” Andrew said.

While the country’s largest superannuation funds are now growing into the tens – and even hundreds – of billions of dollars in funds under management, Andrew believes Qantas Super’s relatively smaller size is its competitive advantage, allowing the fund access to a number of niche investment opportunities.

“We’ve been able to build quite a quirky, or somewhat idiosyncratic, investment portfolio,” he said.

Among Qantas Super’s diverse investments are Australia’s Oyster Coast, one of Australia’s leading rock oyster businesses; SiteMinder, an online system allowing hotels to manage online bookings; and IMEIK Technology Development Co, a leading producer of injectable hyaluronic acid products for aesthetic medical application in China.

This focus on Qantas Super’s competitive advantage has paid off: three of Qantas Super’s investment options were named the top performers in their respective categories over the 2020/21 financial year by leading independent research house, SuperRatings.

This would be great news in any year, but it’s a particularly big achievement coming off the back of significant market volatility caused by a once-in-a-century global pandemic. Having spent his earliest days in the job steering Qantas Super through the GFC, however, Andrew said the experience through COVID was markedly different.

“Back in late-2008, I was in the very early stages of getting to know the assets and the managers, and I didn’t know the architecture of the investment program. Roll forward 10 years and everything has been built by our team, so we knew what we had and how it was likely to perform in certain environments,” Andrew explained.

“When you have that knowledge and insight, the variable you obviously can’t control is how markets move, but if you understand the underlying components, you know which levers to pull and when.”

As Andrew explained, Qantas Super was in a strong position in terms of its liquidity, which meant the team did not need to sell any private market or illiquid assets to manage through the market volatility. These, in turn, were the assets that subsequently over-delivered and helped power our record returns in 2020/21.

After 13 years at the helm, Andrew is as excited as ever about Qantas Super’s work as we get stuck into 2022. Our focus is on balancing return, risk and sustainability, while ensuring we provide Members with good value for money investment products.

“It’s not a static landscape; everything is always changing, so we’re always being challenged,” he said.

“Plus, I enjoy working with great people who are all focused on the same thing, which is delivering for our members.”

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