Avon Pension Fund's Liz Woodyard pictured outside Bath Guildhall
Liz Woodyard – the group manager for funding, investment and risk at the £6bn Avon Pension Fund – is due to retire at the end of this month after a long career in the investment and pensions industry. In this interview, she tells Professional Pensions about her career and the industry changes of the past four decades.
Can you begin by telling me a little about your career please? How did you get into finance and what led you into the LGPS?
I left university in 1986 just as Big Bang deregulation happened, so it was a great time to start a career in finance. I joined an investment bank and ended up as a bond trader. There were very few women on the trading floor at the time, so you had to be able to stand up for yourself! But I soon realised trading wasn't my forte and I changed career by moving into investment management.
I managed equity portfolios and was very fortunate to work in New York for a number of years, which was a fantastic time for me. While at Friends Provident I become involved in responsible investing, managing some of their stewardship funds, at a time when this was still very niche.
After working as an asset manager, in 2003 I moved across to Avon Pension Fund. Working for a local authority, and the LGPS in particular, was a totally different environment to what I was used to. Culturally it is supportive and collaborative and there are far more women colleagues and of course most of our LGPS pension fund members are female (around 70% of Avon Pension Fund members are women).
For the last 15 years, I have been responsible for all the financial aspects of the £6bn fund, driving the investment and funding strategies so that our committee is able to make sound strategic decisions that will ensure we can pay our member their pensions on time and the fund remains solvent.
What have been the highs and lows of your career?
When you look back, the highs and lows change. There have been a number of highs but the lows seem less negative as time passes! My lows include being made redundant early on in my investment management career, but this made me realise that change was normal in the City and often opens new and better opportunities. Highs include my time in New York, where I managed the Latin American portfolios and had the opportunity to travel extensively in the region.
How have you seen the investment industry change over the past four decades?
It has changed dramatically. When I started index funds and computerised trading had yet to make their mark. Fund managers were stock pickers first and foremost as information flows were less efficient and a good analyst could identify undervalued stocks. Over time it has become more processed, information is far more efficient, the markets are more global and investors have become more short term.
Looking at the LGPS in particular, how have you seen investment evolve during your time at Avon?
Working at a defined benefit pension fund is very different to being an asset manager concerned only with the performance of a portfolio. Our investment strategy has evolved as the funding needs have changed over time. At the turn of the century, funding positions were healthy, as was public sector funding and investment strategies were quite simple. This has changed over the course of the last twenty-five years as bond yields fell. As the public sector funding environment has deteriorated significantly, affordability and stability of contributions has become very important to our employers. So, our investment strategy is measured against the liabilities and we use risk management tools to reduce volatility.
How has LGPS pooling changed the way in which local government schemes invest? How will Fit for the Future and the evolution of pooling change LGPS investment further?
I think pooling has been a positive for the LGPS. It has increased the range of assets that funds can invest in and any asset allocation changes can be implemented quickly without the need to do our own procurement or due diligence. It has also increased innovation. Our pool, Brunel, has developed industry leading climate aware and sustainable portfolios spurred by client demand. Pooling has also reduced investment costs which benefits all LGPS funds regardless of size.
Pooling requires collaborative working, compromise and a need to build strategic relationships – this will be more important now in pooling ‘version two' as the pools take on greater responsibility for their clients' strategic asset allocation. I expect innovation will continue and further cost synergies to come through. But the ultimate success factor is whether performance will improve and that is not a certainty.
One of the big trends of the last twenty or more years has been the rise of responsible Investment and stewardship. How have you seen this evolve in the LGPS?
Investing responsibly is one of our core investment beliefs. When I joined Avon in 2003 we already had a UK equity portfolio that invested in a socially responsible way by mainly excluding certain stocks and sectors.
Over the years this type of investing has evolved into responsible or sustainable investing and is now quite mainstream within the LGPS, with a greater emphasis on stewardship and engagement as opposed to exclusions. With our pension committee reflecting the range of employers and members within the scheme, social justice and responsible investing has been high on their agenda but it is always considered alongside their fiduciary duty. Balancing the two can sometimes be difficult to navigate through.
To what extent do you see role models and mentorship as important in the pensions and investment industries?
I think role models and mentors are important in all walks of life. I was lucky having parents that were excellent role models and gave me a clear set of values to follow. Throughout my career I have had great managers who have supported me, encouraged me to go outside my comfort zone and given me confidence to challenge when I think it appropriate. I have learned that you are never too old to develop your skills and that colleagues of all ages offer valuable perspectives. So, I value mentorship, and a large part of my recent role was to mentor and support my team and colleagues across the fund. For a pension fund, staff are our critical resource so it's common sense to develop and nurture them so that we provide an excellent service to our members and employers.
CV: Liz Woodyard
Position: Liz Woodyard is group manager for funding, investments and risk at the £6bn Avon Pension Fund. She is due to retire at the end of this month after 22 years managing the LGPS scheme's investments. Woodyard has lived in Bath for over two decades and says her retirement plans include travel and possibly a dog.
Previously: Prior to joining the Avon Pension Fund, Woodyard was a fund manager working in the City, most latterly at Friends Provident between 1993 and 2003. She graduated with a BSc from City St George's at the University of London and has an MBA from the University of Bradford School of Management.
