Adrian Orr is one of those people who isn’t at all fazed by the responsibility of taking care of someone else’s money. Even $31.4 billion of it. That task comes with his role as CEO of the New Zealand Superannuation Fund.
And he doesn’t blink — as he might have back in his Taupō days — because he’s now had time to become match fit in this sort of financial game. First there were a couple of degrees — one from Waikato University and then another from Leicester University in the UK. And, over the last 24 years or so, there’ve been stints in Paris at the OECD, then back here with the National Bank, the Reserve Bank, Westpac, and the Reserve Bank again, before landing the CEO job for the Super Fund in 2007.
He’s really nailed that. The fund has been reeling in all sorts of international awards for the classy way it has been operating. It’s not just a matter, either, of winning applause and prizes. The payoff is that young Kiwis, as they become old enough to qualify for superannuation, will get those dollars from this fund that Adrian and his team have been nursing along and building through astute investment decisions.
Here he chats with Dale, who, like many others, has been curious about Adrian’s Cook Islands whakapapa.
Adrian: Kia orana, Dale. Well, our Cook Islands connection is through the George whānau. My grandfather, No’oroa George, was born on the island of Atiu in the southern Cook Islands and came out to Aotearoa in the early 1930s. Mum Shona was born here soon after he arrived, I think. And 12 of his brothers and sisters also turned up.
Our branch of the whānau settled in Taupō, but the rest of the George whānau ended up in Rotorua and were mostly employed there at the Waipa Sawmill. No’oroa — or Poppy, as we knew him — was probably one of the first Cook Islanders to settle here. He was mostly involved in tree planting, in the Rotoaira forest and then Kāingaroa. And Mum remains in Taupō today, along with many, many of our cousins.
Dale: And what about your old man?
The old boy (Mike) was lucky enough to meet the beautiful vahine in Taupō. He was of Irish descent. So we’re a Cook-Irish mixture. His dad had left Ireland in 1918. That was before the split between the north and the south over there. Dad died a long time ago. Forty years ago. I was still a young fulla. Only 13. His dad had died early too, so I grew up mainly knowing my Cook Island family. On my Irish side, the Orr family were a lot older. I’ve got a few cousins who I stay close with. They’re in Hamilton and Auckland and around the country.
You’d feel a bit shortchanged, losing your dad as a young teen?
Yeah, you do. It’s a horrible thing. And being 11, 12 or 13 is an impressionable age. I’m the youngest of three boys who were pretty close in age. Dad was a builder and he was nine-tenths of the way through building a motel in Taupō when he died. So Mum and us three took that over after his workmates finished it for us. And we ran that right through secondary school.
So, it was a good, early introduction to business and to dealing with the public. It was hard times though. But they say that what doesn’t kill you makes you stronger. And we seem to have survived.
Good on you, Adrian. With your Cook Island whānau there in numbers in the central North Island, I imagine there were some rich family experiences as you were growing up.
The rich part for me was Pop, my grandad, who was just up the road. He was a freaky dude. A big, tall, handsome man. He could grow anything, anywhere. There we were in freezing cold Taupō. Pumice-lined streets. And he had broad beans, avocado trees — every possible fruit.
In fact, one of my best memories is when the three of us Orr boys made it on to the front page of the Taupō Times holding the big, record-setting potatoes he’d grown. He taught me a lot. He taught me how to set the pace. How to conserve. And preserve.
And another good memory was when, in the early 1970s, one of our cousins from Rotorua became Miss Geyserland. That was very exciting for us.
And who did you kick around with at high school?
That was at Taupō-nui-a-tia. We were a mixed up bunch — Cook Island, Māori, and Tokelauan, too, because they arrived en masse in the early 1970s. And our family helped them settle in. Pākehā were a rare commodity when we were growing up in Taupō. Our bunch were the scallywags — and I was well known in the hood.
That background has been great for me because I’ve been able to ease in and out of whichever environment or world I want to be in. And, more importantly as well, I’ve been able to square people up when I hear them blaming other groups or other nationalities, just through having that diversity in myself. So I can say: “Well, hang on. Taihoa. You probably don’t know who you’re talking to. Or what you’re talking to.”
Then you were a truck driver for a time?
Yep. I did almost everything practical. A plumber. A sewerage pipe layer. A short order cook. A dishwasher. I spent quite a bit of time driving machinery for the local Taupō firm, both during university and then for the first 18 months after that. And absolutely loved it. So I got to play with all those toys that I still miss dearly.
That stint at Waikato University, I understand, produced a Bachelor of Social Sciences degree.
At that age, I wasn’t particularly interested in business. I was interested in people and society. To be honest, that’s still my main interest. I didn’t want to do core management or accounting — I didn’t have the concentration really. I turned to economics to keep me real, and geography to keep me interested. And the two have combined, big time, in later life. I’ve been lucky there.
I headed off after that to the UK to get a masters degree. I wanted to do development economics and go to Africa and all that stuff. I ended up there as a tourist in the end. But in the UK, I taught core economics and other stuff across there.
And I lived a pretty interesting life. I was in London by the age of 21. Absolutely broke with a bunch of mates. We lived in some empty council flats, squatting for several years as we got ourselves through our degrees. And then started our careers in teaching with a lot of Pommy mates. Long-time mates now.
I get the feeling that most people who study economics have ambitions of getting rich. Being merchant bankers or some such. Was that what was driving you?
To be honest, I’ve never had any desire for great personal wealth. Obviously you want to have security and comfort. And, when you have your kids, you want to be able to look after them. But no, pursuing wealth has never driven me. I wanted to be able to — and I know it’s going to sound corny — I wanted to make the world a better place than how I found it.
The kaitiaki concept is deeply ingrained in me and I think that’s throughout the Polynesian mindset. And it’s stuck with me forever. For me it’s about how societies move. What is equality? What is wealth generation? It’s those big societal questions that fire me. Trying to be a merchant banker doesn’t do it.
So my current job heading the New Zealand Super Fund is a beautiful mix with its big, long-term, intergenerational challenges — and its hard-edge economics and finance. It’s a nice balance.
In this role, you’re managing pūtea for a lot of hard-working people. It’s a big responsibility. But I understand that it’s ticking over quite nicely.
Yeah, well, we’ve built from scratch what is widely considered the world’s best performing sovereign wealth fund, which is the NZ Super Fund. We’re more famous around the rest of the world than we are in this country. And we’ve done that not only in financial performance but also in responsible investing.
In the current climate, there’s an expectation of ethical investment. That’s an important consideration even though much of your performance is, I guess, rated by the financial performance.
I think you’ve got to put that word sustainable in front of that. It’s got to be a sustainable, long-term performance. And for that to happen you have to care about the environmental, the societal, the governance — the kaitiaki aspects of society. Otherwise, it’s not sustainable. So, we work very hard to identify what’s important to the fund with regard to all of the factors around being a responsible, long-term investor.
And we’ve held ourselves truly honest to that. And that set of values is ingrained through our staff. It’s not even challenged. Everyone just gets on with it. So, to us, it feels completely normal to be asking the hard questions around all of those issues when we’re making investments or doing deals. To a lot of other folk it seems new. We’re not unique in the world but we certainly set some global benchmarks and standards to how we want to do our business.
Can we talk a moment about financial literacy because, at times, it feels like that’s the domain of the rich. Even in our education system, where you’ve got a contrast, I guess, between what’s taught in some schools. King’s College and Ōtāhuhu College, for instance. I wonder how much access many of our Māori and Pasifika students have to the financial literacy skills they need as adults.
I agree that it’s a concern. Let’s be honest — it’s not a sexy topic for most people. And they tend to think about it as the domain of the rich and famous. But it’s actually a topic that affects every one of us from the minute we put our foot on the floor in the morning. And that has to be better accepted through all of the school curriculum.
I don’t know why it’s so poorly delivered through the education system — unless you’re at one of the elite schools where there are specific courses. Overall, it’s a real failing. In fact, it’s a crisis because there’s such little understanding of the importance of saving. Of the power of compounding interest rates. Of the importance of earning rather than paying compounding interest rates. Of the need to educate yourself to do a budget.
All of this is really standard stuff. But most people would’ve gone to sleep listening to that — because it just doesn’t sound sexy. So we’ve got to make it available to people. And interesting, too. You know, I’ve seen my mates fail School C — and then they had to help me box a field at the TAB. So they’re not stupid. They just weren’t taught or engaged.
This has to just move on. I don’t think we’re doing nearly enough in the education system. We all need the ability to save and the confidence to invest and look after our economic self as well as our cultural and environmental self. All three are a virtuous circle.
Has there been an advantage to certain circles of our society, in keeping the masses at bay?
I wouldn’t say it’s a conscious effort. It’s more an outcome of having some money and then starting to think: What am I going to do with this? What’s this thing about a mortgage? What’s this thing about investing? What’s this Kiwisaver thing?
If you’re already in the game, it becomes more interesting. But if you start without any role model in the house, or without any spare cash, it’s an abstract concept. It’s not real. And so we have to cross that bridge.
When I went to primary school, we all used to bring in 10 cents once a week and put it in our Post Office savings account. Just simple, little routines like that can create interest — and lead on perhaps to investing in Kiwisaver. I hope those who are employed get into it. Do the Kiwisaver. And start learning through building up your own little pūtea.
When we look at Māori investment strategies, there’s an expectation of ethical investment and also of managing the pūtea so the people can get some of it. It’s not just about building it up. So how are we travelling in that regard? Do you think we’re doing okay?
There are some that aren’t travelling well. And some that are absolutely exceptional. And that’s the case in any population. For instance, you’ve got the big boys in town. There’s Tainui and Ngāi Tahu where the pūtea arrived after 150 years of nothing. And, bang —they’re able to set up governance structures, strategies and portfolios. So that’s been trucking along as expected.
Now the real challenge that’s coming, is this: “Hey, where’s this trickle down thing? And how is that manifesting?” And those are great quality problems. You know, there are always problems — but these are quality problems.
Where the real problems and challenges are is when the true purpose of the money and of the investments hasn’t been discussed and agreed upfront. And people start heading off down different paths, and then maybe having to sell up when they didn’t want to.
So my advice is to have a kōrero upfront. Really understand the purpose of this money. And how you’re investing it. Then the rest is quite mechanical. You can engineer it. You don’t even have to do that yourself. You can get some expert to come along and sort it out. Just have that conversation upfront.
But you have to agree on the purpose of the fund. And stick to that purpose. And don’t deviate. Over-communicate. Be transparent. Be deliberate.
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