Many wondered what was behind his decision to quit the research house he helped forge over two decades. Was he pressured into leaving? Was he frustrated with the company’s direction?
Van Eyk, in a recent interview with IFA, sets the record straight. “It was entirely my decision to quit. It was just time,” he says.
“I thoroughly enjoyed being at the helm of a company at the leading edge of industry developments, and certainly it was a pleasure to help so many outstanding people develop their careers.”
Since leaving VER, he says he has finally had the chance to mow his “jungle” of a backyard and pursue other hobbies, including horseracing and breeding.
He has also spent time giving asset allocation advice to Chris Cuffe’s charity fund and has also been invited to give his views on the economy and markets at a raft of industry events and internal briefings.
“I am a lot less stressed now and I am taking the time to think about what I want to do next in my professional career,” he says.
Van Eyk’s decision to enter the industry traces back to 1987, when he heard about the boom that would take place in Australia after compulsory superannuation kicked in.
His first stint was as a research analyst at financial planning firm Godfrey Weston in 1987. He says research available at the time was “fairly ordinary” and he decided to establish research house Purvis van Eyk with James Purvis in 1990.
It became VER five years later.
The firm’s business model is still the same as it was when it was established – not charging fund managers for ratings – a model van Eyk still passionately believes in.
“Obviously the manager wants to achieve the best outcome possible and will want to influence you at all stages of the process. Not having a monetary relationship always helps to achieve the analyst’s aims,” he says.
In the past 10 years, van Eyk and VER current managing director Mark Thomas diversified VER by forming an asset consulting unit and van Eyk Blueprint, a fund-of-funds business.
The move caused a stir in the industry. Fund manager UBS Global Asset Management decided to terminate its relationship with VER in 2005 as it began to view the firm as a competitor rather than a research house.
But van Eyk defends the decision to start Blueprint.
“I think it makes research totally transparent and it certainly ensures analysts think about portfolio construction seriously since they are responsible for adding value. I have no doubt this extra responsibility made VER analysis more useful to financial planners,” he says.
Van Eyk says research houses today are more sophisticated than they were 10 years ago and mostly did a good job going into the global financial crisis (GFC) due to their sound strategic asset allocation recommendations and emphasis on portfolio diversification.
“Compared to the past, portfolios in the GFC were more diversified. I guarantee you that leading up to 1987, 90 per cent of what was sold were equities,” van Eyk says.
However, in the future research houses need to do a better job of constantly monitoring how funds invest for the benefit of advisers, he says.
