Recycled Roux eyes greener pastures

After leaving Escala Partners, Giselle Roux is looking for a new career in the impact or sustainability space.

Giselle Roux

Three weeks after walking out of Escala Partners’ offices for the last time, Giselle Roux is at home, trying to cram 27 years of her life into a stack of cardboard boxes. The veteran investor, who led Escala’s investment team for more than six years, and her husband have just sold their house in one of Melbourne’s leafiest suburbs. As she packs up, she’s mulling her next career move.

“I’d love to be involved in the impact or sustainability space. It’s mainstream, people want it, and it’s enormously important … And even if you don’t agree with the principle, these are businesses that are going to grow because they have a commercial bent in it,” she says.

“They’re not charities; they have a commercial enterprise that is going to hopefully improve environmental and sustainability outcomes.”

Struggling to understand the opposition to the sustainability movement, she likens it to a small industrial revolution.

“We’re moving on from the horse and cart to the car. Why won’t we fix the recycling system? Why won’t we invest in companies that can recycle things? Why are we littering all this stuff around the world? It’s not about the litter — it’s a wasted resource.”

A passionate investor, it appears Roux may stay in the financial sector but she scoffs at the idea of setting up her own shop.

“Oh no, 100 per cent not. No, no. But I want to make as much of a contribution as I can,” she says.

Part of that contribution is speaking out on the obscure fee structures and conflicted advice that persist in the industry.

“The royal commission was very much focused on the banking sector and industry funds, somewhat unfairly, because I think they actually do a pretty decent job for their fee structures … I don’t understand why there’s some reluctance by the government to cast a little bit more of a spotlight on fee structures across the board of financial markets.

“Take listed investment companies, for example, that report their performance before fees: I mean, no one can invest before fees, so why are they allowed to report a return before fees? It makes no sense. It’s 101. I’m just aghast the industry doesn’t clean itself up before somebody is forced to come in and say you’ve got to be cleaned up because you're not reporting correctly, or people who have a limited understanding of financial markets can’t actually understand what they're getting.”

The drive for more transparency is separate from her decision to leave Escala, she says.

“It’s entirely a broader industry issue. And there’s a whole bunch of conflicts. I see Liberal MP Tim Wilson asking the industry funds why they have marketing events. I mean, fund managers are just marketing machines. There is wining and dining going on everywhere. At the end of the day that money is coming out of investors’ pockets. From nowhere else but investors’ pockets.”

Alongside the opacity of funds management fees, she says she sympathises with investors trying to navigate the murky market outlook. “I can't think of a good reason to put more money into (the local sharemarket). But I’m also doing the incorrect thing in saying I can’t think of a good reason to pull out. You shouldn’t say that, you should either be putting in or pulling out, you shouldn’t sit on the fence. I think the market feels expensive, but I can also see why it might just hold on to these levels for quite a bit because no one knows what to do so it may just hang around there.”

Globally, it may feel like equity markets are nearing the end of the cycle, but cycles are “very vapid” in terms of their definition, she cautions.

The low-growth world means corporate profits can’t grow at historic nominal rates because that would imply higher than average real rates, a prospect Roux deems “nonsensical”.

“People need to rebase what they consider to be a relatively benign level of growth for the underlying indices, and then consider which companies have arguably got better than most potential. And the easy throw­away line is invariably some kind of disrupter. I know people are bored and tired of that word, but the fact of the matter is it still remains a relevant feature, so anything from payment services in financial markets, to different forms of energy, to different forms of food as we go into this so-called beyond-meat type of consumption pattern that may arise.”

Leaving behind her old home and job, Roux is as energetic as ever about the possibilities that lie ahead. The coming weeks will be spent clearing out the house, taking meetings on her next career move and, of course, listening to podcasts. A huge podcast fan, she lists the BBC’s In Our Time and Infinite Monkey Cage as among her favourites. “I don’t listen to financial podcasts. I read a lot of financial stuff. I don’t need that in my podcasting,” she says.