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Who is Andrew Hunter

Posted: Fri Mar 23, 2018 3:59 pm
by Stomper
http://www.afr.com/leadership/leadershi ... 418-go8pki

EFIC CEO Andrew Hunter found a siege mentality at the government export bank

Macquarie Group veteran Andrew Hunter arrived at the federal government-owned Export Finance and Insurance Corporation three years ago to find an institution under siege.

EFIC was under constant attack - from the Productivity Commission and the new coalition government - for losing sight of its role and too often choosing the relative safety of backing big resource projects rather than up-and-coming small exporters.

Under the former chief executive of 10 years, the institution had developed a siege mentality.

Former chairman Andrew Mohl, on whose watch Hunter was appointed chief executive, wanted "someone to come in and look at it afresh", Hunter tells The Australian Financial Review.

"I think one of the problems the organisation faced was they felt the Productivity Review was a beat up and they needed someone to come in without the emotional baggage and say what was real and what was not.

"I didn't agree with all of them but I could understand why they reached the conclusions they reached."

For example, the commission had criticised EFIC for providing more than 20 loan guarantees to Shark Bay Salt, a Western Australian supplier of pure salt to high end food markets in Japan and Indonesia - even though the company was part of the giant Japanese trading house Mitsui.

"They were transactions we should not have done," Hunter says.

It also helped finance large domestic resource projects - including Santos's share of the $20 billion Gladstone liquefied natural gas project, because the gas giant couldn't get commercial finance after the global financial crisis.

EFIC is increasing SME loans more rapidly than big project loans EFIC
"It was after the GFC and I could understand the argument, but I could equally understand that markets ebb and flow and it's not necessarily the role of a government bank to lend to large Australian corporations."

Hunter thought EFIC had lost sight of its purpose. He was well placed to help the institution rediscover it. Now there are only two people on the executive who were in those roles when he started.

A self-described "small government person", Hunter had returned from high powered jobs looking after Macquarie's European, Middle Eastern and African business for his young family to grow up in Melbourne.

The first thing he did was spend a lot of time talking to clients, reasoning he could learn more from them than from talking to EFIC staff about what they had been doing for 20 years.

He posed two questions: "Why does the government have a bank? What are they doing?" and "Where are the market gaps?"

He didn't think EFIC should be like EXIMBank, the giant US federal export bank whose biggest client is Boeing, one of the world's most successful exporters.

The first and most obvious gap he identified was small and medium enterprises (SMEs) which struggle with access to loans - especially those with turnover of below $5 million. Rather than spend weeks scrutinising their balance sheets, which are usually weak anyway, he convinced the staff to be pragmatic and focus on the strength of management.

Can we sell eyelashes?
If they had won an export contract against the best the rest of the world could throw at them, that might suggest they were capable managers, he argued.

In one case, the fledgling eyelash extenders company Cherry Blooms, he decided not to seek collateral over stock because "if they can't sell the eyelashes what hope have we got?"

Hunter worked with former trade minister Andrew Robb to cut red tape by adding direct loans to its powers, which traditionally focused on loan guarantees, which require credit assessments from both EFIC and another financier, delaying the loan.

They got the time to approve a loan down to 42 days, and have loaned 32 SMEs $24 million, an average of $750,000. Last month they launched EFIC Direct, an online portal for loans of $250,000 or less with a seven-day approval. If it goes well, the cap will be lifted.

The second market gap is loans to resource projects in third world countries. These can be too risky to be funded entirely by banks, but often offer Aussie mining services SMEs great opportunities. A recent example was Rio Tinto's Oyu Tolgoi copper and gold project in Mongolia. EFIC consulted SME suppliers who gave the mining giant a glowing review and provided a $150 million guarantee.

Part of the new pragmatic approach is seeing success in terms of serving the market gaps, not in pursuing size for its own sake. SME loans have doubled, and Hunter think EFIC can double them again. But loans to big projects have shrunk dramatically.

"We don't get excited about building a big balance sheet and doing big deals. We get excited about helping small business," Hunter says.

Re: Who is Andrew Hunter

Posted: Fri Mar 23, 2018 4:07 pm
by Stomper

Re: Who is Andrew Hunter

Posted: Fri Mar 23, 2018 4:15 pm
by deaneus
Sounds like he's overqualified.

Re: Who is Andrew Hunter

Posted: Sat Mar 24, 2018 12:56 pm
by The Nude CPA
deaneus wrote:
Fri Mar 23, 2018 4:15 pm
Sounds like he's overqualified.
Well, we're paying him a damn sight less than the previous CEO, who was underqualified, so what's the problem?

Re: Who is Andrew Hunter

Posted: Tue May 29, 2018 9:59 pm
by JWheldon
So what does Andrew Hunter the new CEO think of the CPA Program? He is an outsider looking in