There are many multi-boutique funds management businesses in Australia, but few come close to the scale of Pinnacle Investment Management.
With more than $61 billion in assets across its funds management affiliates, its nearest competitor in terms of scale is legacy giant Challenger's Fidante Partners, in an industry that has many successful but smaller players.
I decided that if I was going to stay in investment management, you had to be excellent at it. There is no point in doing something if you are not going to be excellent.
The Sydney-based operation has, over the last 14 years, attracted restless fundies from the big banks looking to branch out on their own.
The business is the brainchild of managing director Ian Macoun who has risen from being a humble civil servant to one of the top executives in Australian funds management.
Macoun grew up in Rockhampton, Queensland. He studied a bachelor of commerce at University of Queensland after winning a bonded scholarship from the state.
On finishing university, he found himself at the Queensland state treasury, where he would spend over a decade of his life.
"It was a fantastic place to start a career because they gave young people a lot of responsibility, and you're working on really important things and you could see [that] you could make a difference to people's lives," he says.
Young Macoun thought he wanted to become a head of the treasury. This wasn't a far-fetched goal, given that over the years he has risen to the rank of first assistant under the treasurer.
But life had other plans.
The government set up QSuper (which is now exploring a merger with Sunsuper) to manage the "investable balances" that the state treasury was accumulating from public sector superannuation schemes, worker compensation schemes and other government investment funds.
Within the treasury, Macoun had already overseen the investing of these funds, and as QSuper took off, he began to oversee its investments.
"It might have been a couple of billion or something, which we wouldn't think is all that much now, but it was a huge amount of money then... the amounts were starting to grow very rapidly because that was the beginning of Keating's compulsory super," he says.
"And we said, 'oh my goodness, this is going to be really serious so let's think about the best way to invest this money'."
Macoun recommended the best way for QSuper to handle its investments would be to set up a body specialised in investing.
And that became QIC, or Queensland Investment Corporation, which has since grown to be an $80 billion investing juggernaut, and a major player in private and unlisted markets investing.
Macoun was involved in writing the legislation for QIC, and the team decided to lock out the politicians from investing decisions and stack the board with corporate Australia's masters of the universe; including former AMP chief executive Alan Coates and Jim Kennedy, who later manned the boards of Commonwealth Bank and Santos.
By this time Macoun was 33 years old and ready to go back to his treasury dreams, but QIC's newly-fangled board still needed his services.
"I thought my job was to make sure the board was established and operating well, and then they'd go and recruit a chief executive from the private sector and I'd get back to my job in treasury," he recalls.
"They said, look you have articulated the vision for this — because I needed to work with them enough to make sure they understood what the government's objectives were with it - and to cut a long story short, they asked me to be the chief executive for QIC."
He still had an eye out for the treasury job but building QIC was too much fun, and he ended up spending almost half a decade in the role.
"I loved it so much, and there was so much to do. We really started from a blank sheet of paper, which was a great opportunity to set things up," he says.
Five years into the job, in 1993, he was approached by a person he describes as an "executive search character".
Macoun didn't return the recruiter's call for three days, until his assistant pointed out it may be worth talking to the guy as QIC might be able to use him for its own recruiting.
The recruiter talked Macoun into moving to Sydney to run Westpac's funds management business, back when BT was still a competitor.
"I could spend an hour just talking about how that all happened, and how my wife every now and then gets angry with me and says we were supposed to come to Sydney for five years, and here we are 26 years later," he laughs.
In the early 1990s, Westpac was rebuilding itself under the leadership of its American chief executive, Bob Joss, and Macoun led the funds management business for four and a half years.
"I decided that if I was going to stay in investment management, you had to be excellent at it. There is no point in doing something if you are not going to be excellent," he says.
He had come to believe that to build an enduring funds management business, the fund managers had to have a good environment, which banks didn't necessarily provide, and the infrastructure support (i.e distribution, sales, back office and client services).
Macoun ended up talking to IOOF to take over its Aussie equities and fixed interest investment decisions, and turn them into boutiques.
He brought in John Murray, whom he had hired into the Westpac business from Maple Brown Abbott, and housed the IOOF teams in a new multi-boutique business called Perennial Value.
"We were very successful and it proved our theory about boutiques. But IOOF was demutalising and their shareholders said it should own all of IOOF," Macoun recalls.
Macoun ended up leaving, while Murray stayed. IOOF got a bigger stake in Perennial, which it held on to until 2019 when the management bought it back.
Over the years, Macoun admits, he has had some misses. And he has built a playbook for him and Pinnacle's directors on what does and doesn't make fund managers work.
"I'd love to say that it's a red flag if these people are extremely confident, but I can't say that because they're all extremely confident. If they weren't, they wouldn't have achieved the success they have," he says.
In his spare time, Macoun loves audio books and has a pile of recommendations. One that sticks out is King of Capital, which tells the story of how Steve Schwarzman built Blackstone into a resilient, diversified investment house.
At 65, succession is the elephant in the room, much as Kerr Neilson had to hand over the reins at Platinum Asset Management.
"I am sort of continuing to bulk up the management team, we have expanded it and we've got a lot of good experience there," he says.
"And so at the right time [there] will be succession but for the time being, that's not the foreseeable future because I am very much enjoying it." fs