Q Group (Vice)President's Report

Introduction

This year I have the honour of presenting the president's report on behalf of Rob Blackwell. As many of you know, Rob and his family are soon to move the United States. Rob is taking up an exciting new challenge with his employer, Frank Russell Company.

I think that he is already well over half way into this new role and is doing the commute between Tacoma and Sydney. I understand that tonight he is either in Tacoma, or on a plane somewhere, and cannot be with us.

Rob will be a loss to the industry in Australia, and to the Q Group in particular. I am sure that you all join with me in wishing him the best for the future.

Review of the year

The year has been an active one for the Q Group. We held a successful joint conference with the SIA, a fully attended and busy colloquium and 11 seminars in Sydney and five in Melbourne.

I believe that this constitutes a rewarding programme and well and truly meets our objectives as an organisation. Before I deal with each in turn, I think that all of the membership can be congratulated for their strong support of the group during the year. On behalf of Rob and the rest of the Committee, thank you.

SIA Joint Conference

The joint conference was held in July and attracted 119 attendees. Of these 21 were Q Group members, 19 SIA members and 57 paying non-aligned attendees. The press and speakers brought the total to 119.

The conference was successful conference in anybody's language. It also fulfilled that part of our Charter, which relates to promoting the role of quantitative approaches within our industry in Australia.

Topics covered at the conference were:

• Risk
• Strategic asset allocation
• Investment policies for large defined benefit funds
• Quant tools demonstration
• The lighter side of some "poor" strategic investment decisions
• A panel discussion on making active management work
• Unusual asset allocation problems
• Non-standard asset classes

The whole conference would not have happened without the massive amount of work put in by Peter Vann, Silvana Lau and Jim Coleman. They deserve our special thanks.

The Colloquium

The Colloquium in September was also very successful. We had a large attendance of 45 people, and a very full agenda. In fact we were somewhat embarrassed by having too many willing participants and had to ask several to speak at different forums. We also had to limit presentations to 20 minutes, which many people believe was insufficient time to do justice to the material.

The Sydney seminar series

Finally, the evening seminar series was very active with 11 events through the year with seven speakers from outside of Australia.

I believe that the seminar series is a critical activity for the group. Obviously members benefit from hearing leading thinkers present their work. But more than this, it is our only regular forum for members to get together during the year.

Garry de Jager performed a tireless effort in arranging these events and I thank him on behalf of the whole group.

Melbourne activities

At this time it is appropriate to mention the activities of the Melbourne chapter. Scott Lawrence kicked off the activities of this group and has now passed the baton to Paul Litchfield and Kim Sawyer.

Since inception in mid 97 Melbourne has held six seminars, mostly at lunch time. As a new chapter, keen on developing the membership, they opened these sessions to non-members. These sessions were very popular with consistent attendance levels of around 30 people.

We wish this chapter great success.

Web site development

I should also mention the efforts of Rob Trevor who recaptured control of the web site and promoted its new construction. He was able to attract Mark Yuen and Ernie Chow who have been willing and active volunteers on developing the web site. Together they have laid the ground work for what I believe will grow to become a major contributor to the Q Group meeting its objectives of advancing quant knowledge between members and to the larger community.

Survey

I now turn to the membership survey.

The Committee felt that we should ask members what was working and what wasn't. We sent out a brief survey several weeks ago and have received some responses.

I must say, however, that most members have not yet responded and I ask you to do so. It is important that the Committee has a reliable baseline from which to make decisions. The survey only takes a couple of minutes to fill out.

Q Group directions

It is normal at this time each year that we touch base with the membership to ask: "Is the Q Group meeting its objectives, and do those objectives remain relevant?"

First, what are the objectives of the group? Our Statement of Objects says:

"The objective of the Association is to help those involved in finance and investments to understand and develop quantitative solutions to financial and investment problems."

And our principal activities are stated to be:

"The Association will hold a series of seminars which members will attend. These seminars will be designed to provide a forum for open discussion of quantitative financial research with the view of meeting the Association's objectives. Any surplus funds from members fees after accounting for the cost of running the seminars and the association will be used to fund specific research projects usually in conjunction with a tertiary institution."

Was this objective met during the year?

I believe that it was. Our joint SIA conference was deliberately targeted at promoting the understanding of quant approaches into the broader community.

I also believe that the group well and truly performed its role as a forum for members to learn from each other, and from international specialists.

But what about the future?

The Committee is working on the premise that our charter remains unchanged. In 1999 we will be continuing the evening seminar series and the Colloquium.

But we are questioning the appropriateness of the joint SIA conference and are looking for other ways in which to fulfil our charter with respect to the wider community. This will be one of the main challenges facing the new Committee in 1999. We would appreciate any feedback on this issue, either by contacting individual Committee members, or if there is sufficient interest, in an open discussion tonight.

In a few minutes I will hand over to John Jarratt to present the voluminous Treasurer's report. For now, however, I thought that you might be interested in the fact that the group has finances around [] and that the Melbourne chapter has been quite inventive in discussing how this could be best used to promote the aims of the group.

They had two ideas.

First one member suggested that we should form a committee to invest the money in a "hedge fund"-like manner using quant techniques that our group exists to promote. Then each year (after the money had no doubt doubled) large amounts of positive press, publicity and acclaim would accrue to the Q Group. Apparently this member received a high degree of support.

Other suggestions that have been received in the response to the survey refer to making research grants.

Once again, I urge you to complete the survey response so that your views can be considered by the Committee next year.

Logo competition

I now turn to the logo competition. Earlier Rob announced that Ernie Chow's submission was the winning entrant. Ernie was advised of his success at the recent Melbourne Christmas function. I thank all members who made submissions to this competition, and congratulate Ernie on his success.

Other thanks

Before moving to the formal, re-election part of the evening I would like to express special thanks to Joy Adams who, as the Group's secretary, has performed a tireless effort during the year of ensuring that the Committee met, had a clear agenda for each meeting and each meeting was properly minuted. She was truly the glue that held the group together during the year.

Also thanks to John Jarratt and his PA who made sure that our beans were properly counted throughout the year.

And finally, thanks to all members who participated on committees and events during the year.

Re-election

Joy has prepared a list of members who have nominated for the Committee and sub-committees. We appear to be in the convenient situation where there are just the right number of nominations for positions available. This means that an election is not required so I would ask for two members to move and second a motion to appoint these members to the respective committees and positions for 1999.

Conclusion

I now hand over to John Jarratt who will present the Treasurer's report.

CHRIS CONDON 16 December, 1998