Interview with Warwick Negus
When Warwick Negus left Waverley College in Sydney’s eastern suburbs in 1979, he knew exactly what he didn’t want to do. He didn’t have any wish to study engineering, science or accountancy. And he certainly didn’t consider working behind a bar for the rest of his life.
“My dad was a publican,” explains the man who became one of Australia’s most successful investment fund managers. “We owned the Duke of Gloucester hotel in Randwick, but dad got out of it just before Sunday trading was introduced. He didn’t want to have to work seven days a week.
"No-one in my family had ever been to university, but all my mates were going. I didn't have the faintest idea of what I wanted to be in life so I decided to do a business degree. I'd got good enough marks in the HSC to choose to study business wherever I wanted. I chose what was then the NSW Institute of Technology (now the University of Technology Sydney) largely due to its practicality. A lot of the tutors were from business. They weren't purely academics."
Negus - 51 and a father of four - readily admits he didn’t get the most out of UTS during the four years he spent there, mainly because he worked full time four days a week in BHP’s Sydney office leaving only one day a week for study.
“I wanted to get some business experience and it was a lot more common in those days to do a degree part time while working for a company. “But I wouldn’t recommend anyone to do it by that route today. You miss out on university life.”
Not that UTS was all work and no play. Part of the reason Negus chose the UTS course was that it had an exchange program with Oregon State University. For six months, he studied in the United States. “I don’t think any of the other universities were on to exchange programs in those days,” he recalls. “UTS was blazing a trail. It was very successful and very enjoyable.”
Yet with a first degree under his belt, Negus resigned from BHP and enrolled in a masters course at the University of New South Wales. Why not UTS?
“I believe it is good practice to get multiple sources of education, to experience different points of view,” he says. “And I’m not sure UTS was offering the specialisation I wanted.”
Surprisingly, at UNSW Negus repeated his “mistake” of trying to do too much during the 18 months it took him to complete his Masters in Commerce. “I took a job at the Commonwealth Bank in their international lending area. So I was working full time and studying full time. I didn’t have much of a social life. Lectures would start at 6pm and end at 9pm and I was at university at least three or four times a week after work.”
It was a different world back then. In 1987, the Commonwealth Bank was still Government-owned and heavily restricted. “Around that time, the Australian dollar completely tanked. The banks wiped out a lot of their borrowers, pushing Swiss franc loans. A lot of farmers went in that direction.”
Negus attended a campus interview with Bankers Trust, hoping to be able to explore broader boundaries.
“Campus interviews were a new phenomenon,” Negus explains. “Again I didn’t have a firm idea of what I wanted to do, but I knew Bankers Trust was a good employer and that the finance industry was place where things were happening: the deregulation of the Australian dollar, the deregulation of investment markets. Bankers Trust was very significant in those days, much bigger and more profitable than Macquarie Bank. I didn’t know whether I wanted to be in the trading room, in corporate finance or in investment. But BT just hired a bunch of us and said, ‘Warwick, we want you to go into investment management’.”
Today we are talking in the 17th floor board room of Terrace Tower Group, the family company of the late John Saunders, co-founder of the Westfield Group with fellow Hungarian-Jewish immigrant Frank Lowy. Negus is a board member and chairs the company’s investment committee.
It’s just one of a suite of company, educational and charity directorships Negus has accumulated since he moved on from hands-on management in 2008, coincidentally as the Global Financial Crisis was about to hit.
Negus, his wife Louise, their two sons and two daughters have just returned from a skiing trip to Lech, the exclusive Austrian resort that has long been a favourite with Prince Charles. In a week’s time, he’s off for another skiing trip to the Canadian Rockies. As a long-standing member of Attunga Lodge in Thredbo, he spends at least a week every July in the Snowies,“but that’s mainly watching the kids racing and carrying their skis”.
They live in Sydney’s Point Piper, arguably Australia’s most expensive real estate, and also spend time at their cattle property in NSW’s Southern Highlands. So Negus’s decision to stay in investments has obviously paid dividends.
Global emerging markets
And yet, he readily admits, luck was a major factor in his success at BT. “I was told to sit in a chair and the guy sitting next to me was looking after Japan and Asia. He was run off his feet doing Japan and said, ‘Warwick, why don’t you look after Asia?’. It was a small part of the portfolio then, and I was under his supervision anyway.”
It was a time when the Asian markets - like Australia - were opening up to foreign investors, and Negus was able to delve into new areas. “Stock markets were deregulating from Hong Kong and Singapore to Thailand, South Korea, Taiwan. We were one of the first foreign investors in Indonesia. Eventually we got into India, and right at the end into China as well.”
In 1993, one of the world’s most august financial houses, the Wall Street-based Goldman Sachs, recruited Negus to establish their fund management business in Hong Kong. Goldman Sachs was late into the Asian market, but Negus launched various winning mutual funds which attracted so much private and institutional interest that the Singapore Government made the company an offer to move to the island city-state.
“Our business grew from an Asian business into a global emerging markets business. I was Chief Investment Officer for global emerging markets.” That eventually took Negus and his family to London where he managed “a very large portfolio of clients from all over the world investing in markets all over the world”.
The family returned to Australia in 1999 when Goldman Sachs asked him to work with Malcolm Turnbull in growing the company in Australia: “My job really was to develop the firm’s relationships with the major corporate clients - the Telstras, the BHPs, the banks.”
But he left in 2002 to set up his own “boutique” fund management company with Peter Morgan. They called it 452 Capital - a strange title, know only to those who recognised Sir Donald Bradman’s highest first class score. “It was Peter’s idea, but we were both cricket tragics,” says Negus.
Despite Negus’s proven record in Asian and international markets, the new company had one aim: to direct Australian money into Australian companies. Why the volte face?
“There was an opportunity in the market. There were a number of very large Australian firms investing in Australia and, quite frankly, not doing a very good job. Investors liked the fact they were dealing with the owners (of 452) because we were 100 per cent committed.” In the first six weeks 452 Capital raised A$1 billion in funds under management. “At its peak, 452 had A$9 billion under management. But we only had 10 people on staff.”
Three years later, Negus sold out most of his stake to the Commonwealth/Colonial Bank group on the understanding that he completed three years as chief executive officer of Colonial First State Global Asset Management.
While at Colonial, Negus approved an unusual acquisition for a major bank: the purchase of 40,000 songs by the likes of Bob Marley, John Denver, The Ramones and The Tramps. The latter’s Disco Inferno was the major revenue earner in Colonial’s music portfolio, says Negus, “although Denver’s Country Road and Leaving on a Jet Plane weren’t far behind. Computer games were a big growth area for us.”
When his time at Colonial ended in 2008, Negus stepped away from management. He now devotes a considerable part of his year to philanthropic causes, including the Salvation Army (“They’re amazing people and handling their investments is a unique way I could add value for them”) and educational bodies such as UNSW and UTS. Each year he joins other corporate heavyweights on the Tour de Kids charity cycle ride. This May they’re doing a 1000 km ride through Tasmania.
Re-engaged with UTS
It has been an exciting journey, but Negus acknowledges his debt to UTS. “I received my start in life with a first class education from UTS,” he says. “Without it, I would have taken a very different path with far fewer opportunities.
“Its character and unique qualities of practicality and creativity that attracted me 30 years ago have only grown and evolved. It is now a cutting edge school whose graduates are highly sought after.”
In recent years he has re-engaged with UTS as an alumni and a donor because, he says, “UTS has an exciting future and an important role to play in preparing our best and brightest for their very exciting careers ahead”.
Advice for contemporary students?
“Study full time. Get it done. I chaired the regional recruitment committee for Goldman Sachs for a while, finding new talent. What a global investment bank looks for is a good grade average during your time at university. It’s not enough to pass. And do the other stuff as well. Be part of the university community, contribute to the university.
“Embrace change. Be mobile. And be prepared to do different things in your career. Just because you study accountancy doesn’t mean you have to be an accountant all your life.”
Words: Steve Meacham, February 2013.