FTAV Q&A: Rob Gardner

Completely satisfied Friday! We’re going to attempt to shift this Q&A function a bit earlier within the week sooner or later, however right here’s an interview with Rob Gardner, a veteran of the UK funding business with plenty of fascinating jobs underneath his belt.Gardner co-founded the funding consultancy Redington in 2006, earlier than he left to develop into funding director of St James’s Place in 2019, and chair of the funding supervisor Rowan Dartington in 2021. Gardner then left these roles to discovered Rebalance Earth — a pure capital agency — the place he’s at the moment CEO. He additionally co-founded RedSTART, a monetary training charity specializing in primary-school kids, and has written books for each kids and younger adults. The transcript has been edited for size and readability.FTAV: How did you find yourself in finance? It goes again to Argentina. My mother and father moved there in 1985 — they had been academics. Inflation was operating at about 30 per cent a month. And each month, my mother and father would receives a commission, and we might actually buy groceries — like supermarkets sweep — and purchase all the pieces. Then at evening, we’d drive to this home that seemed like one thing out of Narcos to illegally change their australs or pesos into US {dollars}. We’d go residence, roll them up as a household across the kitchen desk, put them in 35-millimetre movie circumstances, after which conceal them round the home. As a result of it was safer to cover your cash in {dollars} in your own home than financial institution it. Once we went travelling throughout — Bolivia, Peru — I used to be the cash mule. I’d carry all of the {dollars}. I used to be seven years outdated. After I moved again to the UK, I assumed everybody understood inflation, and everybody understood FX charges.After I was doing my A-levels I labored at bureau de change [in France]. Folks would are available, enormous bid affords, and I’d take the cash. I’d lookup charges on the Minitel, get on a moped with all these pesetas, Deutschmarks, change all of it to French francs, deliver it again. And due to that I used to be capable of get my first job working at Deutsche Financial institution on the grad programme — I began out on international change.You’re in all probability greatest identified for having co-founded Redington with Dawid [Konotey-Ahulu]. You had been comparatively younger on the time. I imply, what on earth had been you considering?I used to be like 27 years outdated once I stop. My mum and pop thought I used to be nuts. I’d gone from Deutsche to Merrill Lynch — which is the place I met Dawid. And we thought, “why don’t we begin up our personal consulting enterprise to assist pension funds perceive their belongings and liabilities — the best way to handle them each, and management the dangers?” The shopper downside was actually clear to us. And so at 27 I retired from Merril Lynch — as a result of it let me maintain my inventory. And in Could 2006, Dawid and I co-founded Redington.How did you win your first purchasers? Luck. We’d carried out our 10,000 hours at Merrill Lynch. Dawid and I had spoken to tons of of CFOs, group treasurers, trustees, IC, all of the funding consultants. We’d been presenting the issues and options as Merrill Lynch. Folks knew who we had been. However I bear in mind somebody sat me down, pulled out his enterprise card, and mentioned, “Rob take a look at this. It’s the bull of Merrill Lynch.” And provides this speech to try to maintain me, saying, “Nobody is gonna communicate to you. The one purpose folks communicate to you is due to that. Are you positive you need to throw that each one away?”I suppose we had confidence in our social capital, in our potential to know the issue, and our potential to provide you with an answer. However then that is the place luck is available in. It was 2006. I can’t bear in mind what the deficit of Royal Mail [pension scheme] was. I feel it had simply provide you with a 13 12 months restoration plan, which was — at the moment — tremendous lengthy. And Frank Schinella, the finance director for Royal Mail, was on the lookout for advisers. They’d Rothchilds, that they had Barclays. The trustees had Willis Towers Watson, and he wished somebody to be on his facet with no conflicted enterprise mannequin. We purchased all of the experience and credibility of Merrill Lynch bankers, however we had a enterprise mannequin that wasn’t pushed round attempting to do transactions. So an incredible instance of proper place, proper time. Even now I’ve a stamp made up with Frank Schinella’s head on it, as a result of I feel getting your first consumer is all the time the toughest factor in enterprise. What made you permit the agency that you simply’d began? Two issues actually. Again in 2017, we tried to boost cash to develop to the subsequent degree. We’d had some PE corporations are available and scrutinise the enterprise. They liked the enterprise, they liked that we had all these long-dated relationships with wonderful blue-chip purchasers. The largest dangers they noticed within the enterprise was key-man danger in me and Dawid. The query was, “might Redington win purchasers — might it develop with out you in it?” And as an entrepreneur, that was the purpose the place you need to assume — I’m the proprietor, I’m the co-founder, I’m an fairness holder — all these roles begin to separate out. And I realised that Redington can be extra priceless with out me in it.On the similar time, I had a little bit of a craving to be nearer to be making the selections relatively than advising on selections. And it was simply serendipity that David Lamb, who was the Director of Investments at St. James’s Place, was retiring. On the time they had been about £100bn [in assets under management], and so they had been on the lookout for somebody to affix the manager board. Which additionally was nice for my ego, proper? I feel once I joined, I used to be the youngest particular person on a FTSE 100 govt board — I used to be 39. And so to be chargeable for — on the time — 750,000 purchasers’ monetary outcomes, and £100bn, was engaging and thrilling. And being candid, I additionally wished to place myself ready that — if there was a CEO succession — I’d be near that chance. Very shortly after I joined SJP, Redington obtained two approaches from non-public fairness corporations. And on the finish of 2019, Phoenix Fairness Companions invested in Redington. So my thesis was right. How did you discover the shift from being an founder to being a FTSE 100 firm govt committee member? That was one more reason for doing it — might I scale tradition, might I create transformation? It’s very completely different — they had been an virtually 30 12 months outdated firm. May I deliver my strategy?I used to be described as Che Guevara in disguise. Certainly one of my colleagues mentioned, “you managed to get extra change within the 4 years you had been there, than in a decade.” So, it was difficult, for positive, very completely different. Clearly, you’re not the boss, you’re a listed firm. I feel SJP will get a whole lot of scrutiny — I feel considerably unfairly typically. Nevertheless it’s the largest and most profitable wealth supervisor, and so extremely demanding. It was me who needed to make the decision on Woodford. I needed to make the decision on Magellan. We went from being a single fund supervisor, bottom-up supervisor choice agency, to a high down strategic asset allocation, portfolio building one, launching the world’s largest low carbon fairness fund at COP 26 — the primary wealth supervisor globally to enroll to GFANZ [the Glasgow Financial Alliance for Net Zero]. We did a complete load of cool stuff that we by no means obtained to inform the world about. It’s fairly thrilling whenever you begin considering in items of billions. I constructed a capability mannequin out to a trillion. As a result of SJP will develop.Once we terminated Magellan the week earlier than Christmas, we needed to transfer £10bn. And these had been mental challenges I actually loved.How will we design our fund vary to satisfy the calls for of one million completely different purchasers? We had purchasers who had been infants and we had purchasers that had been 100 years outdated — purchasers in each nook of the UK.And the factor folks don’t realise is that SJP is the biggest payer of individuals in pensions, of any supplier within the UK. We had been paying out over a billion a month of pensions in fee, which is why we needed to begin excited about decumulation and drawdown funds and why we launched our in-retirement fund method forward of anybody else.You’ve now arrange a pure capital agency — Rebalance Earth. What’s ‘pure capital’? Pure capital is investing in nature to derive a monetary return. We try to place nature as resilience by means of a local weather and nature downside that I feel is just not absolutely understood by monetary markets. Nature has all of those ecosystem providers — it cleans water, it shops water, it gives biodiversity that underpins all the pieces that we do. And so you can begin to consider it as infrastructure in the identical method that constructing a port is infrastructure. If you will get paid for these ecosystem providers, that makes it an investable asset class. So, our job is to put money into nature as infrastructure. It delivers monetary returns, it delivers environmental returns, and it additionally delivers social returns, as a result of it improves peoples’ well being and wellbeing and it creates jobs.Are you able to unpack {that a} bit extra?Most fee for nature exists in a compliance market — both carbon credit from web zero or biodiversity web acquire, which is one thing that you need to fund if you wish to do property growth. And over a 15 12 months time period — which would be the size of our first fund — there’s a danger that there’s a change in political regime and [the rules] get ripped up. So we’re all the time looking for individuals who can pay for nature as a result of they need to and must, and never as a result of they’re compelled to.A water utility can pay to deal with the water. The query is, do they construct one thing out of concrete and metal and chemical substances and power to scrub the water? The choice is that we might restore a complete load of peatland and use a complete load of Sphagnum moss and it might clear the water for them. It does a greater job than the incumbent manufactured concrete and metal resolution.I feel what we’re attempting to do is get firms to recognise their local weather and nature-related dangers and dependencies, after which perceive that nature is a very good offset or hedge to that, after which join the 2 and get them to pay for that — and ensure we contract that each one correctly. You’ve authored a kids’s guide about saving and in addition co-founded RedSTART — a monetary training charity. Was that born out of your childhood experiences with inflation in Argentina?Yeah, precisely that. I bear in mind beginning at uni and being stunned that folks didn’t know the best way to funds, didn’t know the best way to save. My theme is all about earn it, maintain it, develop it. And so my mother and father confirmed me the facility of incomes cash and holding it, however they didn’t perceive the facility of rising it. They simply used to place it within the financial institution. After I went to work in funding banking, abruptly there was this concept that you would put money into equities and in bonds and that you would develop your cash.And I suppose what I realised early on in my profession is that there was this type of secret playbook that confirmed you the best way to earn cash, however, ordinarily, folks didn’t know the best way to do it. And I felt very strongly that wouldn’t or not it’s cool if you happen to might train those who? So in 2012 when auto-enrolment kicked in, we at Redington wished to provide again. We knew that individuals who had a DC pension had been in a really completely different place to these on a last wage pension — at a time when folks had no thought the distinction between the 2. What if we might train the subsequent technology how cash works? These youngsters that [RedSTART — the financial education charity] first taught at the moment are 24, 25 years outdated. In order that’s our principle of change. It’s like, “what if folks might be confidently in charge of their monetary future?” After which once I grew to become a dad and my first daughter was born, that impressed me to put in writing “Save Our Acorns”, after which throughout Covid, while everybody was making banana bread and studying to play the guitar, I wrote “Freedom” [a book for young adults]. Final query — if you happen to had been going to do one thing fully completely different outdoors of finance, what wouldn’t it be? An writer writing extra books — I’d like to put in writing a Implausible Mr. Fox equal, however about beavers saving a city. Or a geography instructor.