Theresa Whitmarsh's admiration for IFM Investors' ownership structure and Australia's retirement system were factors that made the opportunity to serve on the manager's board a compelling one for her.
Ms. Whitmarsh, outgoing executive director of the $165 billion Washington State Investment Board, was named an independent director to the board of IFM Investors, the Melbourne-based global infrastructure investor that has A$150 billion ($115.6 billion) in assets under management, on Tuesday.
Launched by a couple of dozen Australian superannuation funds in 1990, IFM's profits feed right back to those funds' beneficiaries, giving it a "mission-driven" feel, similar to the Washington State Investment Board, Ms. Whitmarsh said.
Meanwhile, Australia's compulsory retirement system — with employers over the past 30 years or so contributing 9.5% of employees' monthly salaries to defined contribution accounts — is leaving the country's economy well positioned to prove resilient as its population ages, she said.
With consumption accounting for roughly 70% of developed market economies, "the ability to spend into and through retirement" is becoming increasingly crucial to the economic outlook of those countries, Ms. Whitmarsh said. On that score, Australia is looking far less vulnerable than the U.S., she added.
On May 21, WSIB announced that Ms. Whitmarsh will be leaving the organization at the end of 2021 after 13 years at the helm. A search for her replacement is underway.
With the addition of Ms. Whitmarsh, IFM's board grows to nine members from eight. She becomes the second director from North America, joining Carol Gray, a Canadian who formerly served as president and general manager of Equifax Canada.
Ms. Whitmarsh said IFM didn't manage money for WSIB but she knew David Neal, who became the firm's chief executive last year, after serving first as chief investment officer and then CEO of Australia's sovereign wealth fund, the A$178.6 billion ($136.1 billion) Future Fund, Melbourne.
Ms. Whitmarsh said one area where she hopes her experience at WSIB can prove useful for IFM is private equity. Mr. Neal and the firm have made extending the firm's private equity offerings a strategic target.
WSIB's website showed $171.5 billion of assets under management as of March 31, including $33.1 billion in private equity, $22.6 billion in real estate and $7.5 billion in tangible, non-financial assets.
Of the four business segments IFM highlights on its website, private equity — with A$1.2 billion in assets — remains the smallest, trailing infrastructure, with A$68.9 billion; debt instruments, with A$46.8 billion; and listed equities, with A$38.3 billion.
Meanwhile, the extraordinary response to the pandemic crisis by monetary and fiscal policymakers has resulted in heightened uncertainty for money managers and asset owners alike, Ms. Whitmarsh noted.
"We're all just trying to figure out what's going to happen," she said, adding that WSIB is "going through an asset allocation study right now." Every asset manager, every asset owner "is trying to figure out what the right mix is."
It's an open question whether the Fed is correct in predicting that any spike in inflation figures this year will prove temporary, but WSIB's big commitment to real assets should leave the fund "well positioned" if price pressures persist, she said.
The key will be to build resilient organizations focused on the long term, capable of surviving this disruptive "moment in time" and harvesting the opportunities that result, she said.
