Building Wales’ biggest investor: Rob Lamb on purpose and patriotism

Interviewee:

Rob Lamb
Chief Executive Officer
WPP Investment Management Company

Rob Lamb on building WPP IM Co, matching professional expertise with personal values, and why this role represents his most important career move yet

It is a story as old as time: the local lad made good, going off to make their star in a far away land only to return and use their talents to invest back in their local communities.

Nowhere is this more present than in Wales, ranging from giants of the business like Sir Terry Matthews and Warren East to cultural superstars such as Charlotte Church, the late Richard Burton and – possibly most famously – Michael Sheen.

But why is this the case? For Rob Lamb – who can certainly count himself one of this number – there are a couple of factors at play. He explained: “Generically, as Welsh people, we can be quite tribal – but we’re typically also fiercely patriotic.”

This, he added, creates a strong gravitational pull back to the country and one which has led him to take up the top job at the newly formed Wales Pension Partnership Investment Management Company (WPP IM Co) – which has brought together the eight Welsh Local Government Pension Scheme funds into one investment management company.

How did he take on the role?

While this is Lamb’s first formal role in the industry, in truth his relationship with the LGPS dates back well before pooling was even a twinkle in George Osborne’s eye.

“My parents were both teachers in South Wales when I was growing up,” he explained. “And after retiring from teaching, my father worked in the Rhondda Cynon Taf Local Authority, so literally paid into the LGPS – so I have a strong family connection to the purpose.”

But it’s not just family that connects Lamb to the LGPS in Wales. “I spent 10 of the formative years of my career with a firm called Partners Group, which is Swiss headquartered but globally focused, managing $150 billion of predominantly pension fund money,” he said.

“And among the 900 or so institutional investors it managed money for were a handful of Welsh local government pension schemes.

“So, Swansea Pension Fund, Dyfed Pension Fund, Gwynedd Pension Fund, and Clwyd Pension Fund were all clients at this global company that I worked for. And it might not surprise you that there weren’t that many Welsh people in the building, and certainly not many that spoke Welsh.

“So, wherever I was in my career, either geographically or from a focus perspective, I was always asked to deliver annual updates to those pension fund committees.”

This led to a long-standing relationship with many of the authorities – with some of the officers he’s currently working with there when Lamb started delivering these updates back in 2008.

After moving back to South Wales with his family so that his kids could receive an education in Welsh, he decided he wanted to find a way to contribute to Welsh economic interests, especially given that “every single day of my executive career had been spent outside of Wales.”

As such, and alongside co-founding two digital investment platform businesses, he joined the Development Bank of Wales as a non-executive director and as a non-executive chair of the investment committee.

He added: “And that brought me back into contact with the Welsh LGPS because, even in the early days of pooling, the Wales Pension Partnership was making efforts to collaborate and make investments locally, so I was able to initiate some of the conversations between the Development Bank of Wales and the Wales Pension Partnership.”

So, how did he end up at the Wales Pension Partnership Investment Management Company? Well, to a certain extent it was a happy accident of timing.

“It was an event co-hosted by the Development Bank of Wales earlier this year that I bumped into one of the section 151 officers from one of our constituent authorities, at a time when the government’s Fit for the Future consultation was being concluded,” he explained.

“I had just been on stage talking about the fact that I had recently sold my business and I was actively getting involved in Welsh projects, and he said ‘well, we’ve got a pretty big Welsh project if you’re interested’.”

And it was an opportunity he was going to grasp with both hands as it has allowed for the “very unlikely” scenario of him being able to match up his professional career with what matters to him most personally.

He added: “This is a generational opportunity for me to be able to lead this institution at this inflection point, tasked with doing a number of things that I’ve done in the past. Starting from scratch a FCA regulated company, I’ve done that twice, leading a team that invests billions of pounds in a diversified portfolio, I’ve done that as well.

“So I feel like I’ve got relevant experience, but crucially now the purpose is one that resonates very strongly.”

Balancing the local with fiduciary responsibility

With this generational opportunity comes a crucial balancing act. While supporting local Welsh projects is central to WPP IM Co’s mission, Lamb is clear that fiduciary duty comes first.

“We have a financial responsibility to safeguard pensions, and anything that falls short of that threshold doesn’t even get in the room to be discussed,” he said.

“But then there are examples in other parts of the world, Canada being the most obvious one where, in Ontario, their local government pension plan invests something like 30% of its assets domestically.

“I believe Canada Pension Plan also invests a little more than 10% of their assets domestically, and they are held up as two of the most successful examples of pensions management around the world.

“It is absolutely realistic to have that dual ambition, it’s just important we come from that starting point.”

Key to achieving this balance is building on the foundation already laid by the Wales Pension Partnership. Lamb describes the relationships between the eight constituent authorities as his “biggest inheritance” – not just in how they interact with each other, but in the way they speak about each other when operating independently.

“One of the best attributes of Welsh people is that we definitely look after our own – and there’s a collegiate feeling that is genuine and can only help,” he added.

That collegiate spirit is already evident on the asset side. While some pension pools are navigating complex integration processes, Wales has a headstart with roughly 80% of the fund’s assets already pooled.

The remaining 20% presents more complexity. “That’s an ongoing project to understand exactly what is required of us to take responsibility for those quite varied investments,” Lamb said.

“We are leaning on our incumbent managers for our day one capability, as six months does not give you enough time to build a fully-fledged investment management company from top to bottom.

“But what it does give you is enough time to put in place reliable services from providers we already know, and that’s really the focus. And then, from day two, we can start to make a plan for what needs to come in-house and what will continue to be outsourced.”

Building out the team

Managing that transition requires the right people. When Lamb joined, he was the sole formal member of staff, with immediate focus on securing the roles needed for FCA authorisation.

“We have recently held final interviews for a chief investment officer, an independent non-executive chair, a director of finance and a director of risk. And those are, alongside me, the five senior management functions we need to be filled before we can be authorised by the FCA,” he explained.

“Beyond that, we are advertising for a chief of staff, head of legal, head of communications, and now in the new year we’re looking for someone to lead that local investment focus. That gives you an idea of the day one make up, and we’re aiming for about 20 people in total by the time we receive our authorisation.”

But the team won’t be built entirely from scratch. “The other thing I would say in terms of the make up of the team is that we inherit an awful lot of good work already being done by pension authorities that make up the Wales Pension Partnership, independently, but also collectively,” Lamb said.

“That includes some people who have been central to that over the years, whom I hope to attract to the company on a permanent basis. This would be a small, but important, number of potentially valuable members of this team that will then carry the muscle memory of the past, which I’m looking to blend with some fresh perspective.”

For Lamb, drawing on his entrepreneurial experience, recruitment is as much about character as credentials.

“The most important thing about starting a new company is the people that get on the bus with you. The bus might change direction, you might move seats, but as long as you’ve got the right people on the bus, then you should be ok.”

The essential characteristic he’s seeking is shared purpose. “But then beyond that, it’s that best-in-class ambition that we have. We’ve got a simple landing page as a website at the moment, but on it I’ve written ‘Welsh purpose, global standards,’ and that’s the marriage I’m looking for.”

And that purpose, for Lamb, has a clear human dimension. “The average member of a Welsh LGPS is a woman who earns £20,000 a year – and I feel like that is a purpose in itself, to protect the retirement of those people,” he explained.

“Alongside that is the fact that I live in Wales. I have two young children. I am Welsh. The future of the country matters a lot to me, and I do think this is an opportunity to create an institutional investor here in Wales, for Wales, at a scale that has never existed before – and I don’t take that responsibility lightly.

“So, if you look long term and you can manage that dual purpose, then I think there’s a fair amount of fulfilment possible.”