Jeff Hussey

Global asset manager Russell Investments announced today the appointment of Jeff Hussey to the role of global chief investment officer.

Pete Gunning, who held the global CIO role since 2008, will return to his native Australia to lead the firm’s vitally important Asia-Pacific region. In his new role, Gunning will succeed Chief Executive, Asia-Pacific Alan Schoenheimer, a 22-year Russell veteran, who will transition to a non-executive advisory role. In addition, Gerard Fitzpatrick, currently a senior fixed income portfolio manager, will succeed Hussey as chief investment officer, global fixed income. These changes will take effect on October 1, 2013.

As global chief investment officer, Seattle-based Hussey will direct Russell’s investment management, implementation and research activities worldwide. He brings to the role more than two decades of asset management experience with Russell, including a decade as CIO, fixed income, during which he had direct responsibility for more than $60 billion in assets and oversight of the firm’s cash management strategies. Hussey will also serve on Russell’s Executive Committee.

“Jeff has deeply rooted investment experience in a variety of vital leadership, portfolio management and analyst roles at Russell, including a successful 12-year track record with our bond funds,” said CEO Len Brennan. “He’s a 20-year veteran at Russell steeped in the rich tradition of our multi-asset investing expertise.”

Meanwhile, Gunning will return to Sydney to manage the Asia-Pacific region, which is integrally important to Russell’s business. He brings a mix of global perspective and in-depth understanding of the region to the Chief Executive, Asia-Pacific role. Under his tenure as global CIO, he helped transform the firm’s investment proposition to focus on world-class multi-asset solutions and successfully led Russell’s asset management and portfolio implementation teams through a period of historically challenging economic and market conditions. Gunning joined Russell in its Sydney office in 1996, and will now have responsibility for the firm’s business activities in Japan, Korea, China, Taiwan, Singapore, Australia and New Zealand. He will continue to serve as a member of Russell’s Executive Committee and report to CEO Len Brennan.

“The appointment of our former global chief investment officer, an extraordinary investment professional, to lead the Asia-Pacific business demonstrates Russell’s commitment to this region,” said Brennan. “Pete’s knowledge of Asia-Pacific markets and experience as a global CIO will prove valuable as Russell pursues its growth strategy in the region to deliver customized multi-asset solutions to investors.”

For his part, Alan Schoenheimer has made a number of significant and valuable contributions to Russell’s success over the past 22 years, serving most recently as chief executive, Asia-Pacific.

“Throughout his career at Russell, initially as a senior consultant in our Sydney office and later in institutional and retail funds leadership positions, Alan served our clients with an emphasis on bringing Russell’s innovative multi-asset, outcome-oriented solutions to bear across a wide range of asset classes and strategies,” said Brennan, adding that Schoenheimer will continue to work with him on strategic projects in a non-executive role at the firm.

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The latest appointments expand the number of dedicated actuarial staff employed in the team to 30, one of the largest teams in the industry. Russell’s actuarial consulting business has been at the forefront of innovation in assisting large corporate superannuation funds and public sector schemes – particularly supporting clients in managing their defined benefits liabilities. Russell actuaries consult to seven of the ten largest Australian corporate superannuation funds, as well as some of the largest institutions in the country, and provide advice to more than $80 billion of superannuation savings.

Russell Chief Executive Asia Pacific, Alan Schoenheimer, said: “The traditional role of the actuary is changing driven by the complexity of regulatory demands and uncertain investment markets. This has resulted in a reduced focus on number crunching and an increased focus on a more collaborative problem-solving approach.

“Russell is a multi-asset retirement solutions specialist and our actuarial consulting capabilities help us deliver the outcomes our clients demand,” Mr Schoenheimer said.

“As an asset manager, you can’t manage investments to a specific outcome unless you have a clear understanding of the potential risks you’re facing, and how to manage and mitigate those risks. Our actuaries provide critical information and advice.”

Ms Campbell’s promotion recognises her ongoing contribution to staff and client management since joining Russell in 2009. Ms Campbell has over 20 years’ experience in superannuation and benefits consulting. Prior to joining Russell she spent 18 years with Watson Wyatt (now Towers Watson).

Mr Buttler has more than 30 years’ superannuation and actuarial experience. He was previously a senior consultant at Rice Warner and prior to that an associate director at Deloitte. At Russell, Mr Buttler will focus on actuarial consulting to large complex defined benefit funds.

Ms O’Halloran also has over 20 years of superannuation experience with an intimate knowledge of the management of superannuation schemes. Ms O’Halloran will focus on insurance arrangements for Russell’s clients.

“Russell is focused on helping our clients reach their real goals. These appointments strengthen Russell’s capabilities to deliver multi-asset retirement solutions that respond to the changing market conditions” Mr Schoenheimer concluded.

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The launch is an example of Russell‟s industry leading approach to deliver specific investment outcomes for different client segments, including institutional investors and the financial planning community.

MAGS demonstrates Russell‟s innovative thinking in the creation of outcome-oriented, actively managed funds, and is the latest in a series of customised solutions for the Australian market. The concept has been launched by Russell in the UK, France and Italy with more than $AUD1.8billion currently under management and similar products are planned for other regions, as part of Russell‟s global shift towards outcome-oriented investing.

The strategy aims to deliver long-term capital appreciation equivalent to equity-like returns, but with less volatility than an equity portfolio.

With a focus on the end investor‟s desired outcome, MAGS aims to achieve positive returns that exceed inflation by 4% over a full market cycle.

Russell has already had strong interest in the MAGS concept from insurance companies, defined benefit funds, not-for-profits and superannuation funds, who recognise that traditional fixed income returns won‟t be adequate in the long term, but are not comfortable with the volatility inherent in large equity exposures.

An advocate for outcome-oriented investment portfolios that focus on investors‟ objectives, rather than beating a peer benchmark, Russell believes a paradigm shift is occurring in the way global and Australian investors approach portfolio design.

“In the wake of the global financial crisis, institutional investors and financial advisers have been looking for intelligently constructed portfolios that will deliver the right outcomes for their members or investors, whatever the performance of markets, and whatever the person‟s particular set of needs are,” said Russell Chief Executive Asia Pacific, Alan Schoenheimer.

MAGS is actively managed and has an investment philosophy that breaks free from the static „set and forget‟ approach taken by traditional balanced funds. By incorporating customised asset exposures, adaptive asset allocation and holistic portfolio construction, the portfolio manager can add and remove different components so the Fund in total is appropriately positioned for the market environment at any point in time.

In the current market environment, MAGS is defensively positioned with yield-seeking as a focus across the portfolio. US and emerging market exposures are favoured in both equities and currency. Defensive asset class strategies have been fully de-coupled from traditional benchmarks. Opportunistic credit and emerging market exposures are emphasised, while traditional interest rate exposures are de-emphasised.

MAGS launch opens the door to new institutional and retail alliances

In February, Russell unveiled a new alliance approach to help Australian investors access outcome-oriented solutions and drive the continued growth and direction of the business in the region. The new alliance approach will see Russell seek partnerships with large institutional investors and selected financial adviser groups to develop customised portfolios designed to meet specific outcomes for individual investors. One of the most commonly discussed outcomes is retirement income.

“Today our clients are telling us they want investment solutions that start with the real goals of their investors. In response, we are partnering with institutional investors and selected financial adviser groups to open up access to Russell‟s world-class capabilities and develop highly customised portfolios designed to meet the specific outcomes of those investors,” Mr Schoenheimer said.

Russell’s unique capabilities span five critical areas; capital markets insights, manager research, portfolio construction, indexes and portfolio implementation.

“Russell is one of the few firms with the unique breadth of capabilities necessary to meet client expectations in this area. The quality that makes Russell unique is our ability to holistically integrate each of these components in ways that deliver truly tailored outcomes based on clients‟ real needs,” Mr Schoenheimer concluded.

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Speaking with staff and clients in Sydney today, Russell’s President and Chief Executive Officer, Len Brennan, said the changes are designed to reinforce Russell’s goal to be the recognised industry leader in outcome-oriented multi-asset solutions worldwide.

Under the new structure, Russell’s long time CEO Asia Pacific, Alan Schoenheimer, will be charged with spearheading the continued growth and direction of the Australian and New Zealand businesses, as part of the broader regional growth strategy for the firm.

Mr Brennan said that as one of the world’s largest and most sophisticated investor markets, Australia continued to be one of the biggest opportunities for Russell’s global asset management business.

“We believe the next wave of assets in this region will be channeled into outcomes-based multi-asset solutions – with a strong market opportunity specifically in retirement incomes. Our challenge is to capture this growth while controlling costs in this competitive environment,” Mr Brennan said.

The position of Australasia CEO will be removed as part of the restructure and, as a consequence, Chris Corneil will leave the organisation after fifteen years at the firm and four years as CEO for the Australasia region.

Mr Brennan today joined with staff from the Australian and New Zealand businesses to sincerely thank Mr Corneil for the contribution he has made to Russell over the past fifteen years, and for the dedication he has brought to his work.

“We want to thank Chris for his substantial contribution in building a vibrant business across Australia and New Zealand,” Mr Brennan said.

The duties and responsibilities of the Australasia CEO will be absorbed by the CEO Asia Pacific role and the leadership team in the Australasian region will now report directly to Mr Schoenheimer.

“We’ve recognised a strong global move towards active, multi-asset solutions – an approach that requires a specialist toolkit of investment capabilities including customised asset exposures, adaptive asset allocation, holistic portfolio construction and tax-aware portfolio management,” Mr Brennan said.

“With our long history in building multi-asset solutions for some of the world’s largest investors, Russell is one of the few firms with the unique breadth of capabilities necessary to meet client expectations in this area.”

Examples of how these work together to help clients achieve their specific outcomes include the Russell Australia Value Premium Strategy and After-tax Australian Shares Fund.

Mr Schoenheimer is based in Sydney and brings 22 years experience working in the Australasian region, as well as across a range of global markets. He said that Australia, like many other developed countries, faced a retirement incomes dilemma as people live longer and want to maintain their standard of living.

“Ultimately our focus will be to ensure baby boomers convert their savings into a reliable stream of income and protect their income against the uncertainties of retirement”.

“There is a clear need for innovative market offerings in the retirement incomes space. My role is to ensure Russell realises the full potential of this market opportunity,” he said.

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