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Money follows people

Friday, March 13th 2009, 8:59AM 3 Comments

by Philip Macalister

I have often said that the savings industry is as much about people as it is about money and numbers. A couple of recent events have shown that quite clearly. One of stories we keep hearing, or a question we are asked is: "What is happening at Brook Asset Management?" People are intensely focussed on the company following the departure of its high-profile and much admired founders, Simon Botherway and Paul Glass, and the role of its new owner Macquarie. Investors (both retail and wholesale) were attracted to Brook because of the skills of its founders, but once they left that attraction would invariably wane. Indeed it has. The NZ Super Fund has pulled its mandate with Brook and we hear many of the mandates Brook holds for other investors are being reviewed. This should come as no surprise to people. Money follows people in this industry. We have seen this time and time again over the years. The funny thing is Bothers and Glass haven’t (yet) popped up anywhere. The odd situation Brook finds itself in is that although the high profile founders have gone its processes remain the same and its team are experienced and able. The other one is with the fallout in world markets many investment firms, like Macquarie, have lost some of their aura and attraction to investors. I’m told this is something which weighs on some Brook customers’ minds. The other people story I wanted to touch on was where we see some of the coverage and commentary of the industry at its worst. Here I am referring to how news of Donal Curtin’s resignation as the deputy chair of the Commerce Commission has been handled. As readers know I rate and respect Donal. He brings a lot to our industry, has been an active player and is a decent chap. He may have made some poor judgement getting involved with various parties, but we can all be accused of that from time to time. Curtin’s resignation as deputy chair – he is still a commission member – has been gloated on by some who seem to have it in for businesses he has been associated with like Vestar and Morningstar. The commission has been conducting an enquiry into alleged conflicts of interest, yet no outcome of that has been announced. Yet some have immediately found him guilty when they haven’t heard his side of the story. This is an example of the industry and some of the media coverage at its absolute worst.
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Comments from our readers

On 31 March 2009 at 8:14 am Catherine Hamlet said:
I agree Donal seems a nice guy but his involvement with Kelvin Syms and Vestar was more than poor judgment. He knowingly allowed his name and his qualifications to be used to entice people into investing with Vestar as a result he was well paid.
He would have been aware of the reasons behind some Vestar investments being driven by profits for Vestar rather than benefit to investors. With his analytical skills he would also have been aware of the excessive risks vs return of these investments, thus I can only conclude that he was driven by greed and self-interest like many people in the finance industry.
It seems people in the finance industry, like Donal, are still happily living the same lifestyle while tens of thousands of New Zealanders have suffered. Donal actually gave presentations to Vestar advisers and clients saying why these investments were so good.
He was quite clearly deeeply involved in the whole process of deception.
On 5 April 2009 at 9:57 am Catherine Hamlet said:
I would be very interested in your response to my comments Phil. sorry about the typos.
On 8 May 2009 at 9:20 pm Red Dog The Pirate Guy said:
Donal's self-serving association with Vestar shows that he has no moral fibre.

He is not to be trusted.
Commenting is closed



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