Speaker 1: 0:05

Welcome to Finance Friends with Fabian, where we give our listeners an opportunity to be a part of our conversation with financial services industry leaders. Hear their stories, the challenges they've overcome and the invaluable advice they have for anyone interested in the financial world. Keep up to date with us by following Finance Friends Podcast on Instagram and TikTok. Welcome to Finance Friends Podcast, and today we have Chris Clayton with us.

Speaker 2: 0:33

Thank you, chris. I'm really laughing already at the intro, fabian, so thanks for having me.

Speaker 1: 0:37

Well, it's a pleasure. It's a pleasure. So let's tell us a little bit about yourself, Chris. What's your current role at the moment?

Speaker 2: 0:45

I look after sales and marketing at L1 Capital.

Speaker 1: 0:48

And L1 Capital. It's a bit of insight to L1 Capital if our listeners aren't aware of L1 Capital.

Speaker 2: 0:54

Yeah, we run roughly $8 billion of assets for clients all around the world. We've got offices in Melbourne, Sydney, London, Miami and New York and we run strategies typically hedge fund styled long short equities convertible bonds. We do have some vanilla long only global equities, but it's more return seeking investments.

Speaker 1: 1:13

Yeah, and what does your role involve? What's the head of sales? What does it involve? I imagine there's lots of elements to your role.

Speaker 2: 1:22

Yeah, I might not take head of sales, fabian. We're not trying to be the biggest, we're trying to be the best. So my role is more about looking after the customers that we've got and attracting some new customers who understand what we're doing, but we're not trying to take over the world in terms of being the biggest fund manager. We want to keep our assets to a level where we can achieve good returns, and that's really important. So I've sort of pushed back a bit about head of sales. More head of customers, I think, is probably a better way of thinking it.

Speaker 1: 1:51

Okay, so head of client engagement, and obviously you lead a team. So how many people do you lead? And that's obviously across marketing and client engagement, or client specialists.

Speaker 2: 2:04

Yeah, we've got two or three people in marketing and I suppose eight or nine, maybe ten even in clients. Now we have customers in broker land with our listed investment company, private wealth, unadvised, private clients, advisors, institutions. So we generally have a person or two across each of those channels and then a few in marketing supporting the general effort of communication.

Speaker 1: 2:28

So your role is a combination of leading the team, strategising, dealing with the portfolio managers. Can you talk us through what does a day-to-day look like?

Speaker 2: 2:41

Yeah, we're a fairly small business 50, 60 staff globally and head office in Melbourne, where we have just over 30 staff, and so it's a very. It's a very. It's slightly bigger than a sort of family environment, but it's a small business with no red tape and no bureaucracy, and really my job is the conduit between the investment teams and the operations teams and our clients, and so I like to think about the way in which we manage staff, as I'm really there to support the people who look after our customers. It's not really a boss-to-employee relationship, but we've got all these people out in the field talking to people who have invested their money with us, and if my guys or my girls have a concern and need something, it's my job to help them with that information or solve the problem to make them more valuable to our customers. So, yeah, I really like to think about that a little bit. In reverse. Servant-led leadership would be what the theory would say, but definitely I feel like I work for the people who work for me, if that makes any sense.

Speaker 1: 3:39

Yeah, it does. So what would be the biggest challenge of your role? What are the challenges of your role? Is it managing different stakeholders, I'd say, given you deal with the investment team, the operations team, as well as the client engagement team?

Speaker 2: 3:57

Yeah, there's new challenges every day. We've been very fortunate in that our business has grown very quickly. Over the last five years We've sort of grown from around about $3 billion of client funds to up towards $8 billion now, and that's given us a lot of challenges around the growth. Positive issues like how do we keep up with the inquiries that are coming in, how do we give enough attention to each of the different strategies, and so there's a lot of growth pains, but, as I said to you before, they're really good problems to have. And then you have the different personalities that we have managing money, and I think we all know it takes a certain kind of character to manage money someone who's totally committed to understanding that and that provides some quirks at times. And while we've got really fantastic, brilliant people, they all like to be communicated with in a slightly different fashion.

Speaker 1: 4:50

So making sure we manage that appropriately and keeping the people who manage the money informed about what's going on with their customers yeah, so, based on what I've just heard, it seems like communication is important, important skill in your role, stakeholder engagement skills, as well as empowering people to go out there and best service your clients.

Speaker 2: 5:11

Yeah, I think they're all great points In my role and I think in the customer role and in funds management, you have to be a great communicator and, again, in sort of a leadership role, you want to empower people. That attracts better people to come and work for you. I don't think anybody wants to be micromanaged. People want to be left to do their job and do it as well as they can, and that takes a great degree of trust and empowerment from a leadership position.

Speaker 2: 5:35

I think the only other thing that we didn't touch on there is just technical knowledge. Like our world has changed so significantly over the last decade that I think to be successful in my role or any sort of client role, even a marketing role, you need to have very strong technical capabilities. These days, the number of people in sales and marketing has dropped I don't know by 30% over the last decade and therefore the quality of people has increased. So if you do want to be successful and you want Fabian to reach out to you, you probably have to be a good communicator and technically proficient.

Speaker 1: 6:09

Yeah, and so obviously you're in a very senior position and you've done exceptionally well and representing one of the best fund managers in Australia. How did you get to where you are today? So I'd be keen to hear back from the start. What did you study at university and when did you? And, more importantly, when did you feel that you wanted to work in finance, and was there someone that influenced that decision at an early age?

Speaker 2: 6:37

Yeah, I'm not sure about the second half of that question, but I always wanted to work in finance. It's just something that I was interested in from a very young age. I was the way I grew up in Brisbane, and when I grew up, you could finish school at 16. So I finished school at 16 and the consequence of that was going to university at 17. I had no idea, so I dropped out of university straight away pretty much, and I was working at McDonald's. So I went and worked at McDonald's full time as a manager for a while.

Speaker 1: 7:05

Wow, well, will you share something, colin? I worked at McDonald's for a period of time as well.

Speaker 2: 7:10

I think it's a great training ground. I've had a lot of people work for me over the years or with me over the years who've worked at Macca's.

Speaker 1: 7:16

Best operational business in the world.

Speaker 2: 7:17

Yeah, and you learn to work hard and you learn about processing, learn processing limited customer service, and you know that was a very formative time for me before I went back. And then I sort of went there and started working for a bank and ended up working at Sun Super. I worked for a really wonderful guy, don Luke, who ended up going on to be chair of QIC and a range of other things, and you know Don sort of taught me about superannuation before I moved to the very fast version of this, moved to Sydney to work for Colonial First State with Chris Cuff and, more importantly, john Pearce, and so I had a great career there where John backed me and moved me around and moved me up and down the org chart to do different things in the organisation. And that was a really interesting point actually, when he actually asked me to move down the org chart to do something, and at the time I felt like that was a demotion.

Speaker 2: 8:03

But it ended up being a really great piece of experience and he helped me become the CEO of Acadian, which is an investment firm that was owned by Acadian, owned by Colonial First State. I stayed there for sort of seven odd years before I sort of tried to just turn what to do again and ended up here.

Speaker 1: 8:20

So let's touch on that. You talk about going down the org chart or chain, so maybe talk us through that experience. What does that actually mean?

Speaker 2: 8:31

Yeah, I was an institutional BDM at the time. I guess this is sort of early 2000s and, for those who have a long enough memory, it was when Greg Perry was at Colonial First State, who was the icon of all Australian equity investments. We were taking sort of 80% of the market on Australian equities and balanced funds at the time. And then Greg resigned or retired, as people do, and we started to lose a lot of money from our retail business, which at the time was called Master Funds, more the platforms. And so John asked me to move from being a senior role in the institutional business to go down and work in a mid-level role in the retail business to try and help stop the flow, the outflow from our master trust business. And you know, it's not too dissimilar to the. It's much bigger but not dissimilar to the old one story.

Speaker 2: 9:18

Colonial First State grew so quickly and this is before First Choice we're having a billion-dollar month, so the business was just hiring people and hiring people and as a result, when performance turned and Greg left, we were short on processes and we were short on being repeatable in our sales and client business. So I went down there with the encouragement of John and we sort of set about setting up a process to make sure we were communicating and servicing properly. And look, there was a great group of people at Colonial First State in the time frame. Chris Arati obviously goes on to be an iconic individual at Magellan, but there's lots of them and if you look around the market now, there's many people from that era that have similar positions to me across the industry and they're all doing very well. So it wasn't a big surprise that we were able to sort of change that around.

Speaker 1: 10:03

Yeah, and so you went from. So Arcadian you mentioned, so they're an American firm.

Speaker 2: 10:09

Yeah, Quant Equities.

Speaker 1: 10:12

Yeah, quantitative Equities, and that's so you went there and joined them as the CEO. And what age were you when you joined as the CEO of that firm?

Speaker 2: 10:19

I would have been 29,. I think I was 29 when I went over there.

Speaker 1: 10:24

So how was that? Because I couldn't imagine there'd be too many people that would be sub-40, that would be a CEO of a funds management firm. Yeah, what were the biggest learnings?

Speaker 2: 10:35

Oh, I made some great mistakes early on because you can imagine, I was a testosterone-fuelled, impetuous little 29-year-old I say now as a much, much older person but I had very good people around me and they knew what they were doing, as in they knew they'd put a 29-year-old person in to lead the business. And so, you know, John Pearce was on the board. Graham Hand was on the board. Graham subsequently passed away, a wonderful guy, a doyen of the industry.

Speaker 2: 11:09

John moves on to go to asia and brian bisker came on the board, as well as bruce bonnie haity for those you don't know he's. You know he's the chair of philanthropy australia and probably one of the most ethical, intelligent gentlemen in the industry. And so I was surrounded by really good people who kept a close eye on me and it was uh. Yeah, I made some cracking mistakes, but we had unbelievable success as well at the business. I mean the business. They lent us $10 million to start the business from working capital and we paid that back in nine months and, yeah, it was a really phenomenal experience. Learning how to manage older and smarter people than you, you know, was very beautiful for me in my career. Yeah.

Speaker 1: 11:44

So can you go through, maybe just touch on a mistake you've made, and because at the time you obviously learn the most from making mistakes and you grow the most when you're challenged, is there an example that comes to mind that you've learnt from and maybe that our listeners might make that mistake or may have made a similar mistake and realise that it's okay, you will learn and you will grow from it?

Speaker 2: 12:12

Yeah, you should not give me a category, because we could have a mistake in every category, but I think the point you made at the end there is probably where I will finish. Mistakes are just mistakes and you will move on from them. And when you make one, you feel like it's the lowest of the low. And, as someone said to me over the years, the highs are never as high as you think and the lows are never as low as you think. And that is a very, very true statement. When you're making a mistake, it's just a mistake, just move on.

Speaker 2: 12:43

And I would say most of the mistakes I made in the early days of my career were about moderate or slight exaggerations. I'll get back to you by then. Or I'll do this there or I'll achieve this, and always putting a little bit of gloss on it. And I think when you're a young person, then maybe when you're in sales, you've got a tendency to say that I'm definitely going to win. That customer or this client's very happy not going to leave, and it's that. That as a category of error is one which I think you'll learn as you get older. It's much, much better to be clear, honest and even conservative with the people that you deal with, because people make decisions on the back of your comments. So, as a category, my advice to everybody would be just slow down and say exactly what's going on and let's together work out the correct way forward.

Speaker 2: 13:27

That little bit of exaggeration causes errors.

Speaker 1: 13:30

Yeah, and it's classic. I speak to a lot of advisors and one thing I hear a lot of is you know, that person never got back to me. They said they were going to get back to me and they never did.

Speaker 2: 13:40

I've said from a very early age, my attitude to client business is to win the service game. You want to be the best people to deal with and that way, if someone's got a problem or they've got, you know, a new piece of business, they're not sure where to place. They want to deal with people that are great to deal with, they're intelligent, they're responsive, they're efficient, they're effective. You want to win the service game and so forever I've had that motto and if there's one sort of tip I'd give to anybody that works in clients stop using voicemail, stop using text, answer the phone and talk to people. Stop using voicemail, stop using text, answer the phone and talk to people. People prefer to be communicated with, and verbally and in person is the best way.

Speaker 1: 14:25

Yeah, and I think that has been lost a little bit. Well, probably coming back a little bit more around in-person events, but we did see that, especially over COVID. I think some people can be guilty of it. Oh, that person's too busy. I'll just send them a text message. Just be proactive, get on the phone that might be suitable for you.

Speaker 2: 14:42

That might help you. It might be easy for you to send a text. That doesn't mean that the person that you're liaising with wants to be dealt with via text. Text is what? Short message service? In other words, I haven't got time or I can't be bothered to speak with you and to give you the time that you require for your particular issue. I'll send you a short little text. You need to be adaptable. There are some people where text is quite perfectly suitable and so, fabian, if you responded to me, I know I can send you a text. You've got a lot of things going on and you're probably pretty happy with that.

Speaker 1: 15:16

But that's not the answer for everyone. I guess it depends on what level of service you ultimately want to provide, that's right and, by the way, you'll be gauged on that too.

Speaker 2: 15:24

If you're a fast, quick texting person, that's the kind of relationship that you're going to build. If you've got the time to go in and see someone and have a good chat to them and spend half an hour, you'll build longer, more genuine, legitimate relationships.

Speaker 1: 15:40

And your role at the moment. Just coming back to it, obviously, over your career you've gone from client services in institutional clients to retail, to CEO of a fund. Now you're head of client engagement, you could say, at L1 Capital. What have you most enjoyed throughout your career in different roles? So maybe let's talk about your current role. What do you most enjoy about your role? And if there's one thing you could change, what would it?

Speaker 2: 16:09

be. Oh look, I think it's really easy. What I enjoy most about L1 is the people I work with. We've got fantastic people across the board and a complete commitment to performance, which is customer outcomes. Thinking back to the start, when I sort of pushed back against you, saying it was the head of sales we're trying to keep our assets to a point where we can really perform and therefore all of our conversations are about performance and therefore we're very customer-centric and that's a comment that I use too often customer-centric, but we have great people that only care about performance, and that's a great outcome for our customers. If there was one thing I could change, there's a lot of travel in my world at the moment as we sort of grapple with the growth, and I'll be happy to get off a plane and just settle down in one place. That would be lovely.

Speaker 1: 17:02

So let's talk about that. You obviously home is Brisbane. You spent a fair part of your career in Sydney, Is that right?

Speaker 2: 17:10

Yeah, I lived in Sydney for nearly 10 years and then I commuted to Sydney weekly for probably eight years and now it feels like I commute to Melbourne. I think I came to Melbourne more than 30 times last year, so I'm back travelling a bit, but that's to do with me. I want to be in Brisbane, my family's in Brisbane. It's the best city in Australia by a mile, and so that's my active choice. And I might make a different choice, as my kids sort of don't need me as much, but yeah, at the moment Brisbane's definitely home, and let's touch on that because obviously, to get to where you are and your career you've had there has to be.

Speaker 1: 17:48

You know there's clearly sacrifice involved. Talk to me about that sacrifice and how you, you know, have been able to manage having three kids that have now well growing up. I think your three kids are, you know, almost self-sufficient to a degree. So how have you managed that? Because you know it can be difficult for leaders to manage family life as well as professional life.

Speaker 2: 18:13

Yeah, let's just say I've made lots of mistakes again. Like it's a challenge, you know, family obviously comes first, in front of everything and I'm happy to say that on your recorded podcast, family is way more important than L1 and I love L1, so it tells you sort of how I feel about the family. It is this, you know, mental internal trade-off between wanting to do well and set an example and provide your kids with the opportunities that you want them to have, moving forward but all the time also keeping them grounded and level and not spoiled for sort of basic language. But it's an awful trade-off to make and I think as long as you start with what's the right thing to do with the family and then you build your career and you work stuff around, that you'll be in a pretty good place. Like if there's a marginal decision to be made, the family's got to come first every single time.

Speaker 1: 19:07

Yeah, and it seems like our one is that way, like family's very important. I know Mark Raffi and Joel, the senior people within the business. I I know Mark Rafi and Joel, the senior people within the business. I believe they've all got big families. It's like a kid-a-thon.

Speaker 2: 19:20

Well, the guys, the principals, Mark Rafi and Joel, are all sort of mid to late 40s and I think between them there's 12 children. So they definitely understand family first and we've set our business up in a way that everybody works incredibly hard but there's absolutely no like if somebody wants to pop out and watch their daughter in ballet at 11 o'clock on a Tuesday, it's celebrated People. When they get back, people would say how was it? How'd she go? Rather than where have you been? So that sort of attitude that's led by those guys leads to a. The business is incredibly successful and people work harder than you know. People work hard, but the family is definitely part of what we do.

Speaker 1: 20:04

And on the outside of work. I know you're a great golfer.

Speaker 2: 20:09

I just hired someone who's scratched, so I feel a bit demoralised now. I'm not the best golfer at L1. I'm not even sure I ever was, but I'm definitely not now.

Speaker 1: 20:18

Well, you're a pretty good golfer, so you spend a bit of time on the golf course and you enjoy, you do a bit of. You've built probably some strong relationships over a game of golf as well.

Speaker 2: 20:27

Yeah, look, I enjoy activity. I always want to be doing something to be physically fit. It makes you mentally better. You definitely work out through a few errors that when you're exercising and you're sweating or you're doing something, it helps with your mental capacity. There's just no doubt. As you get older you definitely learn that Exercise should be a key part of anyone's routine. Golf's probably my thing, but that's only because when you get old and I'm certainly approaching the older thing you can't play football, you can't run, you tear a calf muscle or a hamstring in five seconds. So it's a great old person's sport, golf. I always play it with my son as well, so it's good for young people. But it's one of those things that you can play with friends into the twilight years, which I've got a few years to go on. But I'm heading that way.

Speaker 1: 21:19

I'm not there yet with the golf.

Speaker 2: 21:21

You're still pretending you can run around.

Speaker 1: 21:23

I still try and run around not very fast but still try and run around. But it's interesting because obviously with Live Now it's attracting younger people and you know they're celebrating more like a party I saw in Adelaide last week or the week before. Someone got a hole in one and everyone threw their beers at the golfer, which you would never see in golf five years ago.

Speaker 2: 21:42

No, I think that's been an interesting transition, not too different to like World Series cricket and Test cricket. You know, if you take something out of that, it's that don't keep doing things the same way that you've always done them and have enough self-reflection or reflection to be able to look at what you do and maybe totally change it. Sorry, I know you wanted me to talk about golf, but it just makes me think about every single year at the end of the year when we finish business, even if it's been successful. I just want to start again.

Speaker 2: 22:09

Is that the right org chart? Is that the right way of doing it?

Speaker 1: 22:20

Should we be approaching customers that way? Should we message it differently every single year?

Speaker 2: 22:22

challenge yourself to do something differently and hopefully do it better. Yeah, well, if you're not moving forward, you're going backwards. Yeah, as a very competitive world, and you know you've got a lot of friends in the industry, but each of them is trying to strive to be better than the other one, and so it's incredibly competitive yeah, and what?

Speaker 1: 22:32

last question is before we wrap up If someone is maybe a young person that's just finished their finance degree and wants to get into work for a fund manager in maybe a client-facing role, or wants to be a CEO of a funds management firm probably not by 29, maybe, say 40, what advice would you give them?

Speaker 2: 22:57

You do all of my recruiting, so you know how I think about people. I think that there's sort of four metrics that I think about for the person. You've got commercial skills, technical skills, relationship skills and creativity. So, if I just start at the start, commercial skills are being able to say yes and no. I think a lot of people want to say yes. Should we sponsor them? Yes, yes, yes. Learning when to say no as well is a good set of skills and you can be taught that.

Speaker 2: 23:23

Technical skills in my world that's investments, pes, convexity, all sorts of things like that, and you can learn that. Relationship skills you've got to come with that. That's what mum and dad teach their kids, and it's very difficult to teach people to have a different attitude to relationships and people other than what they learned growing up. So you come with that. You should be investing in yourself, but it's a difficult one to change. And the last one is creativity.

Speaker 2: 23:49

Some people just come with creativity. They like art, they like music, they look at things differently and those people often are the X factor, like if you can find someone who's commercially good, technically good, good people, person, and they're creative, they really can be people that make a very significant impact on a business. You don't have to have creativity. There's a lot to be said for the engineering types or the process types, like I am. That gives a lot of repeatability, but they're the four things I think about. That gives a lot of repeatability, but they're the four things I think about. Again, you should be reflecting about where you sit, on whatever metrics you think are important, and you should be investing in yourself and trying to work out how do I become better as a person and I don't mean that for profit reasons, I mean how do I become better as a person for the people I deal with at home, at work customers, how do I just become generally a better person for society and community? And with that, by the way, generally comes promotions.

Speaker 1: 24:47

Yeah, and respect yourself and, ultimately, people around you. Yeah, respect you too. So no, that's really insightful. Thank you very much for coming in this morning.

Speaker 2: 24:57

I wish you'd spent this time trying to find the candidates that I'm looking for, but thanks for having me anyway.

Speaker 1: 25:03

Well, now that our candidates maybe have a better understanding of you and more people would love the opportunity to work with you. But thank you very much, chris. It's been a pleasure. I've obviously known you for a few years now and really enjoyed our relationship. So thank you and for our listeners, tune in to where you can listen to our podcast Spotify and Apple and keep an eye on our socials. So thank you, chris.

Speaker 2: 25:25

My pleasure, Fabian. Thanks for having me. Cheers.

Speaker 3: 25:32

Disclaimer this podcast exists for informational and entertainment purposes only. The personal opinions of the speaker and guests do not represent the view of any other party. If this recording contains reference to financial products, that reference does not constitute advice nor recommendations and may not be relied upon.