When Brian Delaney, Executive Director of Client Solutions and Capital at QIC, “fell into” finance in 1983 it turned out to be the start of a long and successful career helping build Australia’s world class superannuation system. Before he retires at the end of the year, he shares his insights, recollections, and his expectations for super's role in Australia's post-pandemic recovery. By BEN POWER.
It was the early 1980s and Brian Delaney was sitting on the bench of the Brisbane Bullets basketball team watching legends and future Hall of Famers ‘leapin’ Leroy Loggins, Cal Bruton and Larry Sengstock charging around the court.
Delaney was just good enough to get a spot on the bench, but he wasn’t cracking a spot in the run-on team. “I wasn’t that good a player,” he says. “I realised it was never going to be a career.”
He thought about sports journalism, but his journo mates had told him about the weekend work and low pay.
Then in 1983, at 22 years of age, he had a major stroke of luck that solved his career dilemma. Prudential, the UK-based financial services and funds management business, hired him. Less than a decade later, in 1992, compulsory super started, triggering the rapid growth of an industry that is worth $3 trillion today.
“I literally fell into funds management and finance,” Delaney says. “I was in the right place at the right time when a big wave came called compulsory super; and I’ve been on that wave ever since.”
Now at age 59 Delaney is looking to hop off. At the end of 2020 he will retire from his role as Executive Director of Client Solutions and Capital at QIC.
On the eve of his retirement he is reflecting on a journey that saw him working closely with pioneers of the superannuation industry—many of whom became close friends—to help build one of the world’s largest and most lauded pension systems.
Amid the Covid-19 crisis, which has triggered challenges to the very concept of super, Delaney wants his and his colleagues’ hard work to be protected. “I’m a huge believer that we’re starting to tinker with super too much,” he says. “It’s playing with the original intent.”
Delaney wants compulsion to remain and for the Government to forge ahead with a rise in the Super Guarantee to 12 per cent. And he wants the industry to use the strength it has built over the past three decades to play a leading role in the post-Covid-19 recovery through its investments in infrastructure and innovation.
Despite having no ambitions to work in finance, Delaney found an outlet for his talents at Prudential. He was a solutions thinker and interested in people, so he naturally gravitated to business development and strategy, holding roles at Prudential Corporate Management including State Marketing Manager, Regional Manager of Corporate Markets, and Director.
In the early days of super he remembers winning an account with Queensland Coal, a $6 million capital guaranteed fund when rates were around 17 per cent. “I thought all my Christmases had come at once.”
It was also the “beginning of the juggernaut of industry funds”, and he did business with friend and mentor Don Luke, the first CEO of Sunsuper, and later board member of AMP Capital, QIC, and now Chair at QSuper. “Those early days in Queensland set me up. I thought, wow I love this industry,” Delaney says.
In 1993 he moved to Sydney with Prudential, taking on a national role looking after corporate funds and industry funds. He was accompanied by basketball star Gail Henderson, a captain of the Brisbane Bullets and Australian representative, whom he’d been dating for ten years and married two months before the move to Sydney.
In 1998, Delaney was headhunted by Les Fallick at AMP Investments—later AMP Capital—to look after national industry funds. AMP was involved at that stage in the Development Australia Fund, which saw industry funds invest collectively in unlisted assets, in some respects a forerunner to IFM Investors. “I was on the fringes of something that became much bigger.”
When he reflects on his career Delaney smiles at, not just being at the inception of a great industry “but the wonderful, smart, talented people I’ve been able to associate with that have taken this burgeoning thing and made it into the powerhouse that it is”.
These people include former First State Super Chief Executive Michael Dwyer, whom Delaney met when Dwyer was at Asset Super; the late founding Future Fund CEO, Paul Costello, who he met at STA (Superannuation Trust of Australia that merged to become Australian Super ); AustralianSuper CEO, Ian Silk, a friend and fellow board member of Basketball Australia for four years until early this year; Hostplus CEO David Elia; and in Queensland, former Energy Super Chairman Bob Henricks, and IFAA founder, Neil Harvey.
“They taught me a lot about how to think about work with the long term in mind, and how to engage with people respectfully and think about things in a different way.”
It is easy to lose sight of now, but Delaney says industry pioneers, including Mavis Robertson and Gary Weaven, showed incredible fortitude. “There were many battles back then. It was called by many, union super. It was really hammered in the press, but they had the fortitude to keep it going when a lot of people didn’t understand the bigger picture.”
Trust and innovation in those early days was vital. At AMP Capital, Delaney worked with Don Luke and Sunsuper to provide access to investment scale and diversification through the multidimensional Future Directions fund.
Delaney also remembers executing a big property mandate with long term friend John Coombe, the JANA consultant at REST, in just one hour on a plane. “It was right for the fund and solved a problem, however it would now take a year to execute because of all the layers involved in these decisions.”
Amid this busy career, Delaney was raising two daughters and coaching a lot of basketball. Like their mother Gail, both daughters have become basketball stars.
After college at Saint Francis Brooklyn College in the US, eldest daughter Alex, 25, is playing for the Canberra Capitals in the WNBL and studying an MBA at the University of Canberra. Youngest daughter Bree, 22, is in the final year of a basketball scholarship at Fresno State University, where she is studying psychology.
“All three girls in my life are high achievers and have excelled at basketball, and I’m a very proud family person; a massively proud family person.”
Delaney says he is a “huge advocate of work-life balance” and is a big planner. Every year he makes plans around the five things that mean a lot to him: family, career and work, health and wellbeing, friends, and finances. He sets goals in each area, then actually tracks against those goals to make sure he’s doing it.
“A lot of people in life talk about applying their time to things they’re interested in, but they don’t put it in their diary and take stock.”
Delaney remembers one board meeting where he flagged that he would have to excuse himself because his daughter Alex was about to get a huge award and he didn’t want to miss it. He left with the board’s blessing and they talked about the award for fifteen minutes when he returned.
Delaney says leaders who aren’t defensive about work life balance set a good tone for employees. “It shows you’re earthy, real, bleed the same, and cry the same. I think if you were to ask the people who worked with me, they would say work-life balance is one of the things I championed.”
In 2012, Delaney joined QIC—headed by his friend and industry colleague, Damian Frawley—as Executive Director of Global Clients and Markets.
In July 2018, after a short sabbatical travelling with wife Gail, he was sent to the US as Senior Managing Director, taking up residence in Hermosa Beach in Los Angeles.
While the US is a big and deep market, and sophisticated in many areas, Delaney says Americans revere our national compulsory super system, particularly our ability in infrastructure investment and active asset management.
Delaney returned to Australia in late 2019 and stepped back into his old role as Executive Director of Client Solutions and Capital. He was also working with Frawley on the future strategy, just as COVID-19 was just starting to have an impact.
Knowing that retirement loomed, he then worked with Frawley to hire his successor – former Bank of Montreal executive Ravi Sriskandarajah.
Delaney says QIC has been a great investment manager and innovator. “We’ve grown our client base quite substantially over the eight years I’ve been there, both here and offshore,” he says. “And we’ve taken some really smart investment ideas to the market, not unlike what firms like Macquarie and IFM have done.”
“To work with people like Damian, who I’ve been a friend with for a long time, was a great way to cap off the last chapter of my executive life,” he adds.
Delaney says he is one of those Baby Boomers who had super paid for them all their working life, and now at the end of his career is benefitting from years of compounding. “I not only worked in it; but I benefited from it”.
The compulsory nature of super is at the core of its success, Delaney believes. “I think the award super legislation that enacted compulsory super is probably the best bit of legislation I’ve seen from a government that was truly long-term thinking.”
When he thinks of super, Delaney thinks of the benefits it has delivered to members and friends, but mostly to his mother. “It’s meant people like my mother, who contributed during the latter part of her working life, are now living with dignity in retirement. Without that compulsory nature that doesn’t happen.”
But Delaney warns the Federal Government’s use of super to take financial pressure off itself during the Covid crisis could lead to a potential threat to compulsory super. He notes that the $33.8 billion released via the early super release scheme is just less than the Government’s total welfare spend during Covid-19 of $40 billion.
“I think that’s dangerous. If you left people to their own devices they will never save, on average. I’m a massive believe in compulsion.”
Delaney is also a “massive supporter” of the rise in the Super Guarantee from 9 per cent to 12 per cent. He notes that, based on ASFA numbers, employers have to find just $5 a week (per employee) on average to pay the higher contribution rates. “But that $5 a week makes a big difference when you compound it.”
Delaney has witnessed significant change in the industry during his career, including the emergence of industry behemoths. He believes the drive to merge and consolidate will continue, because scale allows funds to become broader financial services institutions and offer more services cost efficiently.
While industry-specific funds like HESTA and Cbus will have significant roles for their members, the multi-asset funds like Australian Super, Q Super, Aware Super, REST, Hostplus and Sunsuper “are going to keep dominating”.
But Delaney warns of a worrying trend, the “race to the bottom” with too much focus on low fees. “I have no doubt fees are important, but there’s got to be a balance,” he says. “If everything was about the cheapest, I’d see more people flying Jetstar and Tiger than Qantas, but I see lots of people flying Qantas.”
Delaney says the industry needs to find a balance between scale/lower cost and value. “The average member doesn’t understand cost in their super fund as much as we think they do. But I think they understand a good return, great service and value for money”.
Delaney is also proud of what the industry has achieved in terms of diversity across all forms and ESG. “For the first twenty years of my career that wasn’t talked about, invested in or focused on like it is now.”
He believes that super also has a critical broader social role in helping Australia’s recovery from Covid-19, particularly around infrastructure spend. “Unlisted, national-build assets, you betcha,” he says. “We know through economics it makes a difference to GDP and jobs; but it also makes a difference to the returns of members.”
Another key part of the recovery will be greater investment in innovation.
He notes that super funds like AustralianSuper and Hostplus are investing more in innovation sectors such as healthcare, technology and medical, including via private equity platforms such as the Square Peg Capital tech VC fund.
Delaney will remain on the board of Trawalla Group, the family office of entrepreneurs and philanthropists Alan Schwartz and his wife Carol, which Delaney says has been a great learning experience and something he treasures. “There are very smart people who seriously think about making others’ lives better.”
He is also having conversations about other future board roles or advisory seats.
And he and Gail want to travel a lot more.
Delaney wants to keep giving back to the industry he loves and that has been so good to him. He has sat on the board of ASFA; the steering committee of the Conference of Major Superannuation Funds (CMSF); and the board of Investment Management Consultants Association (IMCA). He’s also a fellow of ASFA and the Australian Institute of Company Directors (AICD).
Giving back in retirement will also mean formalising his mentoring of up-and-coming executives, which he has done throughout his career, particularly women.
“I’m not going to be sitting around watching TV all day, unless it is the NBA finals …. But I also want to make sure I get the balance right between things I really want to do; and the things that keep my mind active, my body active, and to give back to those that matter.”
While Delaney didn’t make it with the Brisbane Bullets all those years ago, in finance and superannuation he definitely found another game he could win.