1 00:00:03,430 --> 00:00:07,100 Sean Aylmer: Welcome to the Fear and Greed Daily Interview. I'm Sean Aylmer. Last 2 00:00:07,100 --> 00:00:09,430 Sean Aylmer: year, it was a huge year for our super funds. 3 00:00:09,700 --> 00:00:11,840 Sean Aylmer: They were major players in some of the biggest deals 4 00:00:11,840 --> 00:00:15,890 Sean Aylmer: across the country, particularly when infrastructure assets were involved. There were some 5 00:00:15,890 --> 00:00:19,340 Sean Aylmer: significant legislative changes as well, and with the increase in the superannuation 6 00:00:19,340 --> 00:00:22,640 Sean Aylmer: guaranteed to 10%, there's more money than ever running into 7 00:00:22,640 --> 00:00:26,130 Sean Aylmer: superannuation. It comes with a big responsibility for funds to 8 00:00:26,130 --> 00:00:29,420 Sean Aylmer: make the right decisions and help members prepare for retirement. 9 00:00:29,830 --> 00:00:32,240 Sean Aylmer: I wanted to speak to one of our big industry super funds about 10 00:00:32,240 --> 00:00:35,059 Sean Aylmer: how they make those decisions, and what this year holds 11 00:00:35,060 --> 00:00:38,050 Sean Aylmer: for members and the sector more broadly. HESTA is the 12 00:00:38,050 --> 00:00:40,880 Sean Aylmer: national industry super fund for people working in health and 13 00:00:40,880 --> 00:00:46,580 Sean Aylmer: community services, investing around $ 68 billion. Sonya Sawtell- Rickson is the 14 00:00:46,640 --> 00:00:49,890 Sean Aylmer: chief investment officer at HESTA. Sonya, welcome to Fear and Greed. 15 00:00:50,550 --> 00:00:52,240 Sonya Sawtell-Rickson: Thanks, Sean. It's lovely to be here. 16 00:00:52,490 --> 00:00:55,820 Sean Aylmer: We had a cracking 2021 calendar year. What do you 17 00:00:55,820 --> 00:00:58,420 Sean Aylmer: reckon about 2022? What's the outlook for the next 12 months 18 00:00:58,420 --> 00:00:58,450 Sean Aylmer: or so? 19 00:00:59,800 --> 00:01:03,300 Sonya Sawtell-Rickson: 2021 definitely was a great year for investment markets and 20 00:01:03,300 --> 00:01:07,370 Sonya Sawtell-Rickson: super fund returns. Our balance growth option delivered 14. 5%, 21 00:01:07,370 --> 00:01:12,980 Sonya Sawtell-Rickson: and our sustainable growth option came in at 16.7%. Look, 22 00:01:12,980 --> 00:01:15,750 Sonya Sawtell-Rickson: while these are great results for our members, we don't 23 00:01:15,750 --> 00:01:19,220 Sonya Sawtell-Rickson: expect the very good times to continue. I think we are seeing 24 00:01:19,220 --> 00:01:23,100 Sonya Sawtell-Rickson: volatility return. We've seen that start in the very early 25 00:01:23,100 --> 00:01:27,340 Sonya Sawtell-Rickson: innings of 2022. And really being driven by central banks. 26 00:01:27,810 --> 00:01:30,490 Sonya Sawtell-Rickson: I think globally, central banks have really turned a corner, 27 00:01:30,900 --> 00:01:35,270 Sonya Sawtell-Rickson: moving away from providing significant monetary stimulus, and fiscal stimulus 28 00:01:35,270 --> 00:01:38,170 Sonya Sawtell-Rickson: as well from governments, to really starting to reduce that 29 00:01:38,170 --> 00:01:41,610 Sonya Sawtell-Rickson: stimulus, and obviously for central banks, starting to normalize interest 30 00:01:41,610 --> 00:01:45,270 Sonya Sawtell-Rickson: rates. Now, markets are obviously forward looking, and have started 31 00:01:45,270 --> 00:01:47,840 Sonya Sawtell-Rickson: to price some of those interest rate rises, but I 32 00:01:47,840 --> 00:01:50,290 Sonya Sawtell-Rickson: think the speed and quantum of these changes is still 33 00:01:50,290 --> 00:01:54,510 Sonya Sawtell-Rickson: very uncertain. And what we're seeing, markets and the volatility 34 00:01:54,510 --> 00:01:57,690 Sonya Sawtell-Rickson: we're seeing, is really markets adjusting to this new information 35 00:01:57,690 --> 00:02:01,230 Sonya Sawtell-Rickson: and changing expectations. So as we look forward, I think 36 00:02:01,230 --> 00:02:05,090 Sonya Sawtell-Rickson: markets will still benefit from accommodative central bank and government 37 00:02:05,090 --> 00:02:09,299 Sonya Sawtell-Rickson: policy, which should continue to support nominal growth and risk 38 00:02:09,300 --> 00:02:11,919 Sonya Sawtell-Rickson: assets over the medium term. Although in our view, those 39 00:02:12,720 --> 00:02:15,120 Sonya Sawtell-Rickson: returns are likely to be more modest than perhaps what 40 00:02:15,120 --> 00:02:17,050 Sonya Sawtell-Rickson: we've experienced in the recent past. 41 00:02:17,430 --> 00:02:20,870 Sean Aylmer: Okay. So if I'm an investor looking at 2022, and 42 00:02:20,870 --> 00:02:24,560 Sean Aylmer: I'm not talking about a day trader, I'm talking about an investor, what's 43 00:02:24,560 --> 00:02:27,400 Sean Aylmer: the sort of advice? Should I be changing sectors? Should 44 00:02:27,400 --> 00:02:29,870 Sean Aylmer: I be thinking a little differently to how I thought 45 00:02:29,870 --> 00:02:33,300 Sean Aylmer: last year, given that interest rates are likely to rise 46 00:02:33,300 --> 00:02:35,670 Sean Aylmer: as inflation remains relatively high? 47 00:02:36,200 --> 00:02:39,250 Sonya Sawtell-Rickson: Yeah, I think we are entering a bit of a new environment 48 00:02:39,590 --> 00:02:41,230 Sonya Sawtell-Rickson: to what we've seen in the past, and I'd say 49 00:02:41,230 --> 00:02:44,240 Sonya Sawtell-Rickson: the past few decades, really. We've been on a trend 50 00:02:44,240 --> 00:02:46,530 Sonya Sawtell-Rickson: of interest rates falling. We're now sort of moving to 51 00:02:46,530 --> 00:02:49,540 Sonya Sawtell-Rickson: a trend of interest rates starting to rise. Now, what 52 00:02:49,540 --> 00:02:52,240 Sonya Sawtell-Rickson: that means is that assets that are sensitive to interest 53 00:02:52,240 --> 00:02:55,370 Sonya Sawtell-Rickson: rate rises may find it more challenging. So things like 54 00:02:55,370 --> 00:02:59,100 Sonya Sawtell-Rickson: bonds, for example, may fall as rates start to rise. 55 00:02:59,750 --> 00:03:04,710 Sonya Sawtell-Rickson: Things that have inflation sensitivity will benefit. So things like inflation- 56 00:03:04,710 --> 00:03:08,440 Sonya Sawtell-Rickson: linked bonds or breakeven inflation, things like real assets that 57 00:03:08,440 --> 00:03:12,870 Sonya Sawtell-Rickson: have inflation- linked cash flows, will benefit. And similarly, equities 58 00:03:12,870 --> 00:03:15,740 Sonya Sawtell-Rickson: that have pricing power and can pass on some of 59 00:03:15,740 --> 00:03:18,960 Sonya Sawtell-Rickson: these sort of cost increases through to their product pricing. 60 00:03:19,490 --> 00:03:23,760 Sonya Sawtell-Rickson: So look, I think there is an opportunity to reorientate the portfolio and benefit 61 00:03:23,760 --> 00:03:24,880 Sonya Sawtell-Rickson: from this changing regime. 62 00:03:25,639 --> 00:03:28,290 Sean Aylmer: Okay. I'm sort of moving off the market a little bit, because there are a few 63 00:03:28,290 --> 00:03:32,149 Sean Aylmer: things that I think HESTA is really interesting for. You mentioned at the beginning that your 64 00:03:32,150 --> 00:03:36,850 Sean Aylmer: sustainability fund returns 16%, your balanced fund 14%, both great 65 00:03:36,850 --> 00:03:42,840 Sean Aylmer: returns. Was 2021 peak ESG, because of Glasgow and COP? 66 00:03:43,240 --> 00:03:46,280 Sean Aylmer: Or is sustainability here to stay, and is it, as 67 00:03:46,280 --> 00:03:49,410 Sean Aylmer: an investment strategy, one that has a potential to outperform? 68 00:03:50,040 --> 00:03:53,910 Sonya Sawtell-Rickson: Look, I think sustainability is definitely here to stay. It's 69 00:03:53,910 --> 00:03:56,590 Sonya Sawtell-Rickson: not just COP26. I think the reason we are getting 70 00:03:56,590 --> 00:04:00,710 Sonya Sawtell-Rickson: so much momentum coming from things like climate action is 71 00:04:00,710 --> 00:04:03,700 Sonya Sawtell-Rickson: because there's a lot of the community that cares about 72 00:04:03,700 --> 00:04:07,560 Sonya Sawtell-Rickson: these issues. So we're seeing a lot of community interest. 73 00:04:07,870 --> 00:04:11,970 Sonya Sawtell-Rickson: I think we're seeing rising community expectations. That's leading to 74 00:04:12,140 --> 00:04:16,800 Sonya Sawtell-Rickson: reflecting those expectations from institutional investors and asset owners. I 75 00:04:16,800 --> 00:04:18,890 Sonya Sawtell-Rickson: think we're seeing governments coming under pressure to have to 76 00:04:18,890 --> 00:04:21,510 Sonya Sawtell-Rickson: take action to stay in power. And I think all 77 00:04:21,510 --> 00:04:24,510 Sonya Sawtell-Rickson: of these things are really creating the momentum for ESG. 78 00:04:24,900 --> 00:04:24,940 Sean Aylmer: Yep. 79 00:04:25,290 --> 00:04:27,839 Sonya Sawtell-Rickson: Does it deliver strong returns, I think was the other 80 00:04:27,839 --> 00:04:30,700 Sonya Sawtell-Rickson: part of your question. Look, I think I'd point to 81 00:04:30,710 --> 00:04:33,160 Sonya Sawtell-Rickson: our sustainable growth option as a great example of this. 82 00:04:33,160 --> 00:04:36,370 Sonya Sawtell-Rickson: I think there's been a long period where there was 83 00:04:36,540 --> 00:04:40,650 Sonya Sawtell-Rickson: concern. I think that you couldn't really deliver sustainable financial 84 00:04:40,650 --> 00:04:43,489 Sonya Sawtell-Rickson: returns as well as have a positive impact on the 85 00:04:43,490 --> 00:04:47,570 Sonya Sawtell-Rickson: economy, environment, and society. I think our sustainable growth option 86 00:04:47,570 --> 00:04:50,409 Sonya Sawtell-Rickson: we launched in 2000, so it's now got just over 87 00:04:50,420 --> 00:04:55,430 Sonya Sawtell-Rickson: 20 years of investment performance. It's delivered incredibly strongly for 88 00:04:55,430 --> 00:04:57,990 Sonya Sawtell-Rickson: our members. And I think as at the end of 89 00:04:58,440 --> 00:05:01,580 Sonya Sawtell-Rickson: last year, it was the top performing balance fund in 90 00:05:01,580 --> 00:05:04,760 Sonya Sawtell-Rickson: the country over five, seven, 10, and 15- year periods. 91 00:05:05,120 --> 00:05:07,920 Sonya Sawtell-Rickson: So I think we've got evidence now to support our 92 00:05:07,920 --> 00:05:11,300 Sonya Sawtell-Rickson: belief that having a deep commitment to responsible investment is 93 00:05:11,300 --> 00:05:14,950 Sonya Sawtell-Rickson: really important to deliver long- term financial benefits for our members. 94 00:05:15,230 --> 00:05:17,110 Sean Aylmer: Stay with me, Sonya. We'll be back in a minute. 95 00:05:21,670 --> 00:05:24,860 Sean Aylmer: My guest this morning is Sonya Sawtell- Rickson, chief investment 96 00:05:24,880 --> 00:05:29,020 Sean Aylmer: officer at HESTA. Big funds like HESTA are becoming more 97 00:05:29,020 --> 00:05:32,230 Sean Aylmer: active in terms of talking to companies about their ESG 98 00:05:32,230 --> 00:05:35,520 Sean Aylmer: credentials. I know that HESTA recently filed shareholder proposals in 99 00:05:35,520 --> 00:05:37,900 Sean Aylmer: the US taking on Meta, the parent company of Facebook, 100 00:05:38,290 --> 00:05:42,540 Sean Aylmer: and Hormel Foods over ESG issues. Why is that happening, 101 00:05:42,750 --> 00:05:44,610 Sean Aylmer: and what's the strategy behind that? 102 00:05:45,070 --> 00:05:49,510 Sonya Sawtell-Rickson: Yeah. As part of our stewardship activities, we monitor company developments 103 00:05:49,510 --> 00:05:53,590 Sonya Sawtell-Rickson: against our responsible investment priority areas, as well as broader 104 00:05:53,610 --> 00:05:58,110 Sonya Sawtell-Rickson: ESG metrics. Here at HESTA, we've chosen seven priority areas 105 00:05:58,110 --> 00:06:01,070 Sonya Sawtell-Rickson: that are linked to the United Nations Sustainable Development Goals. 106 00:06:01,580 --> 00:06:05,160 Sonya Sawtell-Rickson: And one of those is good health and wellbeing. So 107 00:06:05,610 --> 00:06:08,820 Sonya Sawtell-Rickson: we will file and support shareholder proposals where we feel 108 00:06:08,820 --> 00:06:12,140 Sonya Sawtell-Rickson: companies are ignoring material risks to their business, where they're 109 00:06:12,140 --> 00:06:15,290 Sonya Sawtell-Rickson: not taking sufficient action to address these risks. In the 110 00:06:15,290 --> 00:06:17,190 Sonya Sawtell-Rickson: case of Hormel Foods, which I think is a good 111 00:06:17,190 --> 00:06:21,300 Sonya Sawtell-Rickson: one, we had identified antimicrobial resistance as a growing risk 112 00:06:21,300 --> 00:06:24,390 Sonya Sawtell-Rickson: to good health and wellbeing. The overuse of antibiotics as a 113 00:06:24,390 --> 00:06:28,360 Sonya Sawtell-Rickson: growth stimulant really threatens the effective prevention and treatment of 114 00:06:28,520 --> 00:06:31,460 Sonya Sawtell-Rickson: a number of infections. And we've seen the World Bank 115 00:06:31,460 --> 00:06:33,630 Sonya Sawtell-Rickson: come out on this issue, suggesting that it could impact 116 00:06:33,630 --> 00:06:37,900 Sonya Sawtell-Rickson: global GDP by 4% by 2050, which is obviously material. 117 00:06:38,580 --> 00:06:41,890 Sonya Sawtell-Rickson: And so through our engagement partners, we'd been talking to Hormel Foods for a 118 00:06:41,890 --> 00:06:44,720 Sonya Sawtell-Rickson: number of years on these issues, really trying to encourage 119 00:06:44,720 --> 00:06:47,800 Sonya Sawtell-Rickson: better practice, and better disclosure, and improved research in these 120 00:06:47,800 --> 00:06:50,820 Sonya Sawtell-Rickson: areas. We just felt that the progress from the company 121 00:06:50,820 --> 00:06:54,039 Sonya Sawtell-Rickson: hasn't been sufficient. It's been too slow, and we really 122 00:06:54,040 --> 00:06:56,930 Sonya Sawtell-Rickson: wanted to highlight these issues and bring some attention to 123 00:06:56,930 --> 00:07:00,460 Sonya Sawtell-Rickson: these problems. And so that's a great example of where 124 00:07:00,460 --> 00:07:03,510 Sonya Sawtell-Rickson: we've decided to file the shareholder resolution to try and 125 00:07:03,850 --> 00:07:03,991 Sonya Sawtell-Rickson: improve their company action. 126 00:07:03,991 --> 00:07:08,680 Sean Aylmer: Health and wellbeing is perfect for HESTA, obviously, because you represent 127 00:07:08,680 --> 00:07:12,610 Sean Aylmer: people working in the health and community services sector. Does it weigh on you? 128 00:07:12,610 --> 00:07:16,590 Sean Aylmer: Some of the people that you invest for, they're often quite low 129 00:07:16,690 --> 00:07:19,330 Sean Aylmer: paying jobs, or at least they're not high paying jobs, 130 00:07:19,330 --> 00:07:22,450 Sean Aylmer: shall we say that. And superannuation is so vital for 131 00:07:22,450 --> 00:07:25,700 Sean Aylmer: retirement, particularly for people who earn lesser income and middle 132 00:07:25,700 --> 00:07:28,140 Sean Aylmer: class. Do you think ever think about that when your 133 00:07:28,140 --> 00:07:29,680 Sean Aylmer: making your investment decisions? 134 00:07:30,100 --> 00:07:35,210 Sonya Sawtell-Rickson: Oh, absolutely. You're right, our members come from the caring professions. They're 135 00:07:35,210 --> 00:07:38,730 Sonya Sawtell-Rickson: nurses, aged care and disability care workers. They're early child 136 00:07:39,050 --> 00:07:43,160 Sonya Sawtell-Rickson: educators. And they're also 80% female. As you know, they're 137 00:07:43,160 --> 00:07:46,270 Sonya Sawtell-Rickson: not high paying jobs to start with, often. And then 138 00:07:46,270 --> 00:07:49,020 Sonya Sawtell-Rickson: women also regularly take time out of the workforce, so 139 00:07:49,020 --> 00:07:51,670 Sonya Sawtell-Rickson: they have gaps in their super contributions and balance growth. 140 00:07:52,550 --> 00:07:55,820 Sonya Sawtell-Rickson: We know for our members that their superannuation is a critical 141 00:07:55,820 --> 00:07:59,180 Sonya Sawtell-Rickson: pillar of their retirement strategy. And our research shows that 142 00:07:59,180 --> 00:08:01,660 Sonya Sawtell-Rickson: for many of our members, it's their biggest asset. And 143 00:08:01,660 --> 00:08:04,750 Sonya Sawtell-Rickson: so it contributes heavily to their ability to achieve financial 144 00:08:04,750 --> 00:08:09,980 Sonya Sawtell-Rickson: security and retirement. Obviously, when we think about what drives 145 00:08:09,980 --> 00:08:14,320 Sonya Sawtell-Rickson: us, our purpose, this is incredibly important. Our members are there for us 146 00:08:14,320 --> 00:08:16,780 Sonya Sawtell-Rickson: when we are at our most vulnerable. They're looking after 147 00:08:16,780 --> 00:08:19,470 Sonya Sawtell-Rickson: our children, they're caring for our parents. They're treating our 148 00:08:19,470 --> 00:08:22,330 Sonya Sawtell-Rickson: loved ones when they're sick and unwell. And I think in the last 149 00:08:22,330 --> 00:08:24,290 Sonya Sawtell-Rickson: few years, they've been on the front line of our 150 00:08:24,300 --> 00:08:27,130 Sonya Sawtell-Rickson: COVID defenses. And so we want to give back in 151 00:08:27,130 --> 00:08:29,690 Sonya Sawtell-Rickson: the way that we can, which is really to maximize their 152 00:08:29,690 --> 00:08:33,000 Sonya Sawtell-Rickson: financial outcomes. I should note, though, that it's not just 153 00:08:33,000 --> 00:08:36,319 Sonya Sawtell-Rickson: the financial outcomes that matter for our members. They expect 154 00:08:36,320 --> 00:08:38,610 Sonya Sawtell-Rickson: us to invest responsibly. And we've talked a little bit 155 00:08:38,610 --> 00:08:40,890 Sonya Sawtell-Rickson: about how we do that, but it's very clear to 156 00:08:40,890 --> 00:08:43,230 Sonya Sawtell-Rickson: us that they expect us to take their capital, generate 157 00:08:43,230 --> 00:08:45,960 Sonya Sawtell-Rickson: good performance, but also be responsible in how we deploy 158 00:08:45,960 --> 00:08:48,760 Sonya Sawtell-Rickson: that capital. And so we have a very heavy focus 159 00:08:48,760 --> 00:08:49,880 Sonya Sawtell-Rickson: on that for that reason. 160 00:08:50,260 --> 00:08:53,600 Sean Aylmer: Okay. Now, 80% of your members are female. Now, HESTA 161 00:08:53,600 --> 00:08:56,050 Sean Aylmer: is a little bit of an anomaly in some ways. 162 00:08:56,050 --> 00:08:59,410 Sean Aylmer: You've got a female CEO, a female chief investment officer, 163 00:08:59,700 --> 00:09:02,670 Sean Aylmer: a female chair and deputy chair. That's unusual in the 164 00:09:02,670 --> 00:09:05,800 Sean Aylmer: finance industry to have so many females in those sorts 165 00:09:05,800 --> 00:09:09,720 Sean Aylmer: of roles. And how big a problem is just the underrepresentation of 166 00:09:09,720 --> 00:09:12,390 Sean Aylmer: women in the finance workforce, and what can we do 167 00:09:12,390 --> 00:09:12,780 Sean Aylmer: about it? 168 00:09:13,460 --> 00:09:17,069 Sonya Sawtell-Rickson: Yeah. Look, it's a real privilege, actually, firstly, to work in a firm where 169 00:09:18,040 --> 00:09:20,990 Sonya Sawtell-Rickson: we are representing 80% female, but then to work in 170 00:09:20,990 --> 00:09:24,829 Sonya Sawtell-Rickson: a firm that has equal representation, at board, at executive, 171 00:09:24,830 --> 00:09:28,530 Sonya Sawtell-Rickson: and within the business. As you say, it's quite unusual. It's 172 00:09:28,530 --> 00:09:30,490 Sonya Sawtell-Rickson: the first place I've worked in my career where I've 173 00:09:30,490 --> 00:09:34,650 Sonya Sawtell-Rickson: experienced that. And it's a real privilege. We actually do 174 00:09:34,650 --> 00:09:38,370 Sonya Sawtell-Rickson: a survey every couple of years of our investment value 175 00:09:38,370 --> 00:09:43,059 Sonya Sawtell-Rickson: chain, and assess how much diversity, and gender diversity, and 176 00:09:43,059 --> 00:09:46,610 Sonya Sawtell-Rickson: other diversity there is within that value chain. And the 177 00:09:46,610 --> 00:09:49,360 Sonya Sawtell-Rickson: reason we do that is because we believe diversity improves 178 00:09:49,400 --> 00:09:54,400 Sonya Sawtell-Rickson: outcomes. Obviously, diversity improves debate. It improves decision making, it 179 00:09:54,480 --> 00:09:58,810 Sonya Sawtell-Rickson: improves risk management. So we are quite focused on why, 180 00:09:59,050 --> 00:10:02,190 Sonya Sawtell-Rickson: if this is a lever, we work in complex markets, 181 00:10:02,190 --> 00:10:05,620 Sonya Sawtell-Rickson: obviously the more ideas and insights you can get, different 182 00:10:05,620 --> 00:10:08,579 Sonya Sawtell-Rickson: lenses you can get on a problem, the better outcome. 183 00:10:08,800 --> 00:10:10,969 Sonya Sawtell-Rickson: And what we found in this survey is that in 184 00:10:10,970 --> 00:10:15,390 Sonya Sawtell-Rickson: 2018, across all of our managers, we only had 17% 185 00:10:15,540 --> 00:10:19,610 Sonya Sawtell-Rickson: women managing our capital. We deliberately excluded all of the 186 00:10:19,730 --> 00:10:22,080 Sonya Sawtell-Rickson: back office and other areas, and focused on the front 187 00:10:22,080 --> 00:10:27,059 Sonya Sawtell-Rickson: office decision makers. So look, quite a disappointing outcome, although 188 00:10:27,059 --> 00:10:32,270 Sonya Sawtell-Rickson: it was actually above industry averages, pleasingly. So look, what 189 00:10:32,270 --> 00:10:35,250 Sonya Sawtell-Rickson: we've done with our managers is to really work with them 190 00:10:35,250 --> 00:10:37,530 Sonya Sawtell-Rickson: on case studies of excellence. We've looked at how do 191 00:10:37,530 --> 00:10:40,170 Sonya Sawtell-Rickson: you recruit and try and remove bias from your recruitment 192 00:10:40,170 --> 00:10:43,370 Sonya Sawtell-Rickson: process. How do you generate interest amongst women to come 193 00:10:43,370 --> 00:10:45,950 Sonya Sawtell-Rickson: into our industry? Because it does have a little bit of a 194 00:10:45,950 --> 00:10:48,002 Sonya Sawtell-Rickson: Wolf of Wall Street (crosstalk) . 195 00:10:47,860 --> 00:10:48,510 Sean Aylmer: Yep, yep. 196 00:10:49,179 --> 00:10:51,080 Sonya Sawtell-Rickson: And so trying to sort of explain that not the 197 00:10:51,080 --> 00:10:55,079 Sonya Sawtell-Rickson: entire industry is like that, that there's really some fantastic opportunities 198 00:10:55,080 --> 00:10:59,339 Sonya Sawtell-Rickson: for women. Trying to improve practices around work- life balance, 199 00:10:59,340 --> 00:11:03,460 Sonya Sawtell-Rickson: and maternity leave, and flexibility within our partners so that 200 00:11:03,460 --> 00:11:07,890 Sonya Sawtell-Rickson: they can attract women that need that flexibility. Making sure 201 00:11:07,890 --> 00:11:10,719 Sonya Sawtell-Rickson: that women continue on their promotional scale when they're taking 202 00:11:10,720 --> 00:11:13,329 Sonya Sawtell-Rickson: time out of the workforce to have children. And I 203 00:11:13,330 --> 00:11:17,069 Sonya Sawtell-Rickson: think ultimately, retaining women by creating an environment that respects 204 00:11:17,070 --> 00:11:20,580 Sonya Sawtell-Rickson: them. And I think that requires female leadership at the 205 00:11:20,580 --> 00:11:23,040 Sonya Sawtell-Rickson: top. And I think the work that we've been doing 206 00:11:23,150 --> 00:11:26,480 Sonya Sawtell-Rickson: on The 30% Club to have 30% representation of women 207 00:11:26,480 --> 00:11:30,040 Sonya Sawtell-Rickson: at boards, the work we're now leading, the 40:40 Vision, 208 00:11:30,460 --> 00:11:33,989 Sonya Sawtell-Rickson: looking to have at least 40% female representation in the 209 00:11:33,990 --> 00:11:38,500 Sonya Sawtell-Rickson: executives across major corporations in Australia, I think these changes 210 00:11:38,500 --> 00:11:41,360 Sonya Sawtell-Rickson: will start to create a culture where women feel heard 211 00:11:41,360 --> 00:11:44,939 Sonya Sawtell-Rickson: and are okay to be a bit different. So I think 212 00:11:45,040 --> 00:11:45,540 Sonya Sawtell-Rickson: it's an exciting time. 213 00:11:45,541 --> 00:11:48,760 Sean Aylmer: Yeah, yeah. Yeah, and hopefully the world changes, and in 10 214 00:11:48,760 --> 00:11:52,050 Sean Aylmer: years it's not just women better represented, but actually all 215 00:11:52,050 --> 00:11:54,480 Sean Aylmer: of us have got better outcomes for our retirement savings 216 00:11:54,480 --> 00:11:55,900 Sean Aylmer: because women are better represented- 217 00:11:55,900 --> 00:11:56,011 Sonya Sawtell-Rickson: Yeah, correct. 218 00:11:56,011 --> 00:11:58,390 Sean Aylmer: ... which is the eventual goal. Look, a couple of 219 00:11:58,390 --> 00:12:00,560 Sean Aylmer: things, we're running out of time. But I mean, with 220 00:12:00,720 --> 00:12:03,480 Sean Aylmer: the superannuation guarantee going up to 10%, it will continue 221 00:12:03,480 --> 00:12:05,510 Sean Aylmer: up to 12% over the next three and a half 222 00:12:05,510 --> 00:12:08,130 Sean Aylmer: years or so. That's a lot of money going into 223 00:12:08,130 --> 00:12:09,990 Sean Aylmer: super. And particularly when you're getting the returns like you 224 00:12:09,990 --> 00:12:12,540 Sean Aylmer: got last year, so there's lots of money slushing around 225 00:12:12,540 --> 00:12:16,229 Sean Aylmer: the place. We've seen some really big infrastructure deals, particularly 226 00:12:16,230 --> 00:12:19,079 Sean Aylmer: Sydney Airport being the big one, where superannuation funds got involved 227 00:12:19,640 --> 00:12:22,860 Sean Aylmer: in purchasing an asset outright. Do you think we will see 228 00:12:23,100 --> 00:12:24,410 Sean Aylmer: more of that sort of thing? 229 00:12:25,070 --> 00:12:28,449 Sonya Sawtell-Rickson: Yeah. Look, I think, as you say, we're growing, we've got capital 230 00:12:28,450 --> 00:12:32,160 Sonya Sawtell-Rickson: to deploy. So we're continuing to look globally for opportunities 231 00:12:32,160 --> 00:12:36,500 Sonya Sawtell-Rickson: to really generate the returns. So Sydney Airport, absolutely. And 232 00:12:36,870 --> 00:12:42,059 Sonya Sawtell-Rickson: infrastructure and real assets, long- term monopolistic characteristics, inflation- hedging 233 00:12:42,059 --> 00:12:46,530 Sonya Sawtell-Rickson: characteristics, are natural fits for things like superannuation, where we're 234 00:12:46,530 --> 00:12:50,929 Sonya Sawtell-Rickson: trying to generate real long- term returns. I think private 235 00:12:50,929 --> 00:12:53,240 Sonya Sawtell-Rickson: equity, there's a lot going on and disruption at the 236 00:12:53,240 --> 00:12:55,980 Sonya Sawtell-Rickson: moment, and continuing. A lot of new areas that are 237 00:12:55,980 --> 00:12:58,250 Sonya Sawtell-Rickson: evolving, so I think there's a lot of focus and 238 00:12:58,250 --> 00:13:02,110 Sonya Sawtell-Rickson: attention going into private equity. I think property is evolving 239 00:13:02,110 --> 00:13:04,809 Sonya Sawtell-Rickson: as an asset class. Obviously, we've always had office, and 240 00:13:04,809 --> 00:13:07,810 Sonya Sawtell-Rickson: retail, and industrial. I think healthcare is becoming a more 241 00:13:07,870 --> 00:13:10,320 Sonya Sawtell-Rickson: sizeable area of property. 242 00:13:10,360 --> 00:13:10,390 Sean Aylmer: Yep. 243 00:13:10,970 --> 00:13:13,610 Sonya Sawtell-Rickson: So look, I think we're always on the hunt globally 244 00:13:14,090 --> 00:13:17,230 Sonya Sawtell-Rickson: for areas where we think we can generate strong risk- 245 00:13:17,230 --> 00:13:19,130 Sonya Sawtell-Rickson: adjusted returns, and that will continue. 246 00:13:19,780 --> 00:13:24,420 Sean Aylmer: Sonya, you just sounded like a chief investment officer. One 247 00:13:24,420 --> 00:13:28,280 Sean Aylmer: final one, crypto, Bitcoin, things like that. What's your view 248 00:13:28,280 --> 00:13:29,680 Sean Aylmer: on that as part of an investment strategy? 249 00:13:29,681 --> 00:13:36,560 Sonya Sawtell-Rickson: Bitcoin is a really interesting area. It's got the potential to 250 00:13:36,590 --> 00:13:40,730 Sonya Sawtell-Rickson: pose an alternative to traditional sovereign fiat money. It's a 251 00:13:40,730 --> 00:13:46,140 Sonya Sawtell-Rickson: decentralized system of finance. It allows for digitization and factionalization 252 00:13:46,140 --> 00:13:49,860 Sonya Sawtell-Rickson: of almost any asset, which really creates a huge amount 253 00:13:49,860 --> 00:13:53,910 Sonya Sawtell-Rickson: of opportunity. But as an institutional investor looking at it, 254 00:13:54,010 --> 00:13:58,910 Sonya Sawtell-Rickson: it's also very developmental. We've seen volatility is incredibly high. 255 00:13:58,950 --> 00:14:03,059 Sonya Sawtell-Rickson: It's multiples of equity markets. Custody, safe custody, is a 256 00:14:03,059 --> 00:14:07,610 Sonya Sawtell-Rickson: real challenge. It's still very unregulated, although, obviously we're seeing 257 00:14:07,610 --> 00:14:10,300 Sonya Sawtell-Rickson: these things evolving every day, but at this stage, it's 258 00:14:10,300 --> 00:14:15,870 Sonya Sawtell-Rickson: still highly unregulated. Liquidity, as a significant investor requiring liquidity, 259 00:14:15,870 --> 00:14:19,330 Sonya Sawtell-Rickson: being able to invest at scale is challenging. And obviously, 260 00:14:19,330 --> 00:14:23,800 Sonya Sawtell-Rickson: with our lens, responsible investment, there is still concerns around its use 261 00:14:23,800 --> 00:14:27,960 Sonya Sawtell-Rickson: in illegal activities, as well as its high energy usage 262 00:14:28,040 --> 00:14:32,120 Sonya Sawtell-Rickson: to generate the blockchain. So look, I think it's an area that 263 00:14:32,120 --> 00:14:34,100 Sonya Sawtell-Rickson: we continue to watch with interest. 264 00:14:34,380 --> 00:14:36,520 Sean Aylmer: Fair enough. Sonya, thank you for talking to Fear and Greed. 265 00:14:36,760 --> 00:14:38,280 Sonya Sawtell-Rickson: Thanks very much, Sean. It's been a pleasure. 266 00:14:38,660 --> 00:14:42,110 Sean Aylmer: That was Sonya Sawtell- Rickson, chief investment officer at HESTA. 267 00:14:42,360 --> 00:14:44,680 Sean Aylmer: This is the Fear and Greed Daily Interview. Join me every 268 00:14:44,680 --> 00:14:47,000 Sean Aylmer: morning for the full Fear and Greed podcast with all 269 00:14:47,000 --> 00:14:49,450 Sean Aylmer: the business news you need to know. I'm Sean Aylmer. 270 00:14:49,650 --> 00:14:50,270 Sean Aylmer: Enjoy your day.