Interview with Geoff Lloyd
Chief Executive Officer and Managing Director Perpetual Limited
"The executive team has taken the view that everything has changed in financial services since the (Global Financial Crisis). We're not waiting for the markets to recover (to 2007 levels.) We're not waiting for investment confidence to return. We are more focussed on what we think is the future of our company, and the value we can give our clients, rather than hoping everything is going to get back to the way it was before the GFC," says Geoff Lloyd, Chief Executive and Managing Director of arguably Australia's most trusted company over the past 125 years.
For the past twelve months, Geoffrey Vincent Lloyd ("Just Geoff," he insists) has been in charge of Perpetual Ltd. His was a much-documented crowning in February 2012 when he took over from predecessor Chris Ryan who had lasted less than a year in the hot seat. If no blood was shed, newspaper ink was. Founded in 1886 as a trustee company to look after Australian family trusts, Perpetual has always been a national icon - even more so around the turn of the 21st Century when Perpetual was one of only a handful of major fund managers (along with Bankers Trust, Colonial and County) to dominate the superannuation industry.
In 2003, its share price hit $84 but when Lloyd assumed command Perpetual had become just one of a hundred Australian fund managers, and the share price was hovering around $20. When we meet, in his 12th floor office in the centre of Sydney's ultra-centre business district ("Just a green tea, thanks," Lloyd says as the in-house waiter comes in to take our morning beverage order), Perpetual's share price has virtually doubled to $39. So he must be doing something right?
"The markets have a view," Lloyd smiles. "There were three things I said we'd do. Design a better strategy across Perpetual. Reduce our cost base - and our Transformation 2015 program will release $50 million a year in costs. And lastly, reinvigorate our sales and distribution. "That's started. There is still a lot to do, but the market is reflecting the new strategy and that we are getting on with it as we said we would."
Now 43, Lloyd has other things on his mind during our get-together. His daughter Charlotte, aged five, has just started school. When another senior Perpetual executive pokes her head in, apologising for being late because her son had proved temperamental at his first drop-off, they chat so informally you almost forget their time is valued in so-many hundred dollars a minute. When asked what he likes to do in his spare time, Lloyd says instantly, "Spending time with my daughter, family and friends. That's the most important thing." But he does admit to a rich man's toy. "I like to sail and I have a yacht. I see it in Sydney harbour, but I don't get on it very often."
Lloyd was born in Brisbane in 1968, the son of a kindergarden teacher and a Telstra employee. He attended a state school, Mount Gravatt High, and had a teenage determination to become a policeman. "I started at the police academy right after high school," he says. "That was during the Fitzgerald era, when the inquiry into (Queensland police) corruption was going on. " It was the beginning of what would now be called a graduate trainee scheme, but it offered the young Lloyd an opportunity to study law part time at Queensland University of Technology (then QIT).
Once he'd graduated, Lloyd continued his studies at the Queensland Bar Board and was admitted at the Supreme Court of Queensland in 1991 (later he became a barrister and solicitor of the High Court of Australia and a solicitor of the Supreme Court of NSW). His first job, after leaving the police force, was with the Federal government. The Australian Securities Commission (now ASIC, the Australian Securities and Investment Commission) was the new corporate regulator. Under its first chairman Tony Hartnell, it was charged with supervising the federalisation of Australian businesses.
After two years in the Brisbane office, Lloyd was considered an emerging talent. He was offered a promotion to the ASC chairman's office in Sydney, moved south to NSW to become Senior Legal Officer, and continued until 1994 when he left to join Bankers Trust, then Australia's preeminent financial services conglomerate. By 1997, he'd become General Counsel of BT Australia. And that's when he decided to study for a Master of Laws (MML) at UTS.
"I chose UTS after talking to several people including Rob Coombe (the former Westpac executive and another UTS Alumni)," Lloyd explains. "It offered what I was looking for. I was feeling academically starved, though practically I was in pretty deep. The 1990s were aggressive in the financial services industry. BT was positioning itself, having grown to be number one in Australia. There'd been lots of personal and practical development. But I was starved academically."
Though Lloyd was already in a senior corporate position, he plunged into night-time education. Back then having letters after your name wasn't particularly important in the Australian corporate world. "It wasn't like an MBA is today, something you need to progress commercially," Lloyd says, explaining that studying was something he did for personal fulfillment rather than career advancement. "There weren't a lot of people who had done a masters at that point."
"I thought UTS was the most pragmatic program which attached academia to given outcomes," he explains. "And that's what I found when I got there. Most of the lecturers were experienced practically and commercially, not just academically. And at that point I had decided however long my law career would last, it would be in the corporate not the private sector." Lloyd loved studying at UTS. "The classroom sizes were quite good. The tutorials were good. The class I was in was diverse in terms of gender and experience."
"And the library facilities at UTS were really vital for me. I needed that access and space between work and home to study. It's great the current UTS administration is investing significantly for the future, but still keeping that strong, practical, pragmatic, outcome-focused edge." He finished his Masters with distinction and had the opportunity to continue towards a Doctorate. He thought seriously thought about studying further. "It intrigued me and I wanted to keep (my further education) going," he says. "But the work environment changed…"
The corporate financial services industry in Australia was going through a turbulent time. Bankers Trust was bought and sold twice within two years. In 1999 the Australian division was sold by Deutsche Bank to the Principal Financial Group which in turn sold it in 2002 to Westpac, which renamed it the BT Financial Group.
In 2004, after holding a number of senior positions at BT including Head of Customer and Business Services, Lloyd left to join the St George group as Chief Executive of Asgard Wealth Solutions. Eventually he was appointed Group Executive of St George's suite of wealth businesses.
Yet Lloyd was still keen to continue his education. He had been accepted before he left BT to study at the world famous Harvard Business School in Boston. Because of the switch to St George, he'd put it off. But in 2006, St George's then chief executive Gail Kelly (now Chief Executive at Westpac) said he should take up an upgraded offer: Harvard's Advanced Management course.
Lloyd ranks his time at Harvard as incredibly important in his personal development. It was a four month course, six days a week, starting at 8am and finishing at 11pm. "It was a big commitment, personally and professionally," he recalls. He lived on campus for the first time in his life, sharing quarters with eight others. On the course there were more than 150 students from 54 countries, he says. But compared to his UTS studies was Harvard an ivory tower? "Not at all. It was based on practical experience. And it's a big part of who I am today."
When Westpac took over St George in 2008, Lloyd's career path underwent another interruption. Two years later, he left to join Perpetual as Group Executive of Private Wealth, touted as a future Perpetual Chief Executive. In 2011 he became Perpetual's Head of Retail Distribution as well. Then in February 2012, Lloyd took over the Chief Executive role after his predecessor Ryan had a spectacular falling out with the board after just one year in charge. When he took over the reins, Lloyd was quoted as saying "we need to work harder and faster" to redefine Perpetual's growth strategy. He initiated a structured three year plan – Transformation 2015 – which came into operation in June 2012.
Jobs were slashed, down from 1480 in mid 2011 to 1053 twelve months later. Non-core businesses – such as the Smartsuper self-managed super fund, the Perpetual Lenders Mortgage Service and the Dublin-based international equities operation – were sold or closed. "We had to make sure that what we do, we do very well," Lloyd explains.
"Businesses where we don't have a competitive edge are better done by someone else, so we've been selling. The refocus on what made us great has also released a lot of costs. There was a lot of infrastructure here. We tried to do everything ourselves. So we have entered partnerships. We have outsourced our IT to Fujitsu. We're partnering Macquarie on our platform business. Our international equities are partnered with a global firm called Wellington Management."
"It's all about Perpetual being the independent wealth manager of choice in Australia. We're not a bank. We're not a life (insurance) company. We were distracted by a lot of things we should probably never have been in. I really want Perpetual to be a smaller, more focussed, more profitable business."
He doesn't hesitate. Too often, he says, good candidates for a corporate career try to fast-track their postgraduate studies: to acquire an MBA or equivalent as soon as they can. Lloyd was 30 before he studied at UTS. "I felt I was right in that sweet spot. I'd had five to ten years of work experience. I loved doing my masters because I felt so much of it was applicable to what I was doing then or where I'd been. I still say to people who ask me: "take some time, get some real experience, then study. You'll find it adds more to who you are and what you want to do."
Words by Steve Meacham, March 2013