Money man

Manulife CIO Donald Guloien

Name: Donald A. Guloien
Title: Chief Investment Officer, Manulife Financial and CEO, MFC Global Investment Management
Age: 49
Location: Toronto
Tenure: 25 years

As far as Donald Guloien is concerned, the most important character trait any manager seeking a leadership role needs to possess is a sense of curiosity. “Everyone understands smart, but great leaders are curious,” says Guloien, chief investment officer of Manulife Financial Corp. “They don't accept the status quo. They ask the second-order questions. They ask, 'Why?'”

It's a question Guloien himself often has to ask in his job. In addition to his role as investment chief, he is also CEO of MFC Global Investment Management, which oversees $170 billion of Manulife investments and another $90 billion of third-party client assets, making it one of the largest investment firms in the world. Institutional Investor magazine recently rated it 32nd in a ranking of 300 money managers, the highest Canadian entry.

But Guloien has also played a leading management role in Manulife's aggressive expansion. From the company's demutualization in 1999 to its entry into Japan that same year, he acts as right-hand man to chief executive Dominic D'Alessandro. Guloien's success is a big reason Manulife is growing: in the most recent quarter, it reported record net income attributed to shareholders of $975 million, a 31% increase in earnings over the same period last year, and sales of its mutual funds are among the fastest-growing in Canada. The stock (TSX: MFC) has risen from about $15 in 2002 to now trade just under $40. Nevertheless, Guloien manages to keep it in perspective. “It's fun figuring out where markets are and where they're going to go in the future,” he says. “I love it.”

Guloien started in Manulife's corporate planning department in 1981, the ink still wet on his University of Toronto business degree. He moved quickly up the ladder, taking on roles in the Canadian marketing division and U.S. product development. By 1990, he was head of the individual insurance and annuity business in the United States. But when D'Alessandro joined Manulife as CEO in 1994, Guloien sat down with his new boss and told him he had taken the U.S. division as far as he could, and wanted a new challenge. D'Alessandro appointed Guloien senior vice-president of business development, in charge of plotting the strategic direction of the entire company.

“It was an exciting time,” says Guloien. First up, a wholesale housecleaning. Every unit in the company was evaluated for its strategic value, and at least 15 businesses were sold off. Next, Guloien oversaw the company's demutualization (a move that allowed the company to unlock a lot of equity value), followed by a year-long assignment in Japan guiding the largest direct investment in that country by a Canadian firm, a joint venture with Daihyaku Mutual Life that's now known as Manulife Life Insurance Co. With that deal sealed in 1999, it was back to North America. In 2001, he became Manulife's CIO and had a hand in the $15-billion acquisition of John Hancock Financial Services, a company that is not only a household name in America, but now also contributes handsomely to Manulife's bottom line.

The Hancock deal, which roughly doubled the assets at MFC, also brought new teams of managers and several lines of business into Manulife, including a large timber operation that MFC has since been pouring money into. (Large money managers like timber because it isn't correlated with stock markets. “It's almost boring. You grow it, you cut some and it grows back. It doesn't offer 40% returns, but it does offer nice steady inflation-adjusted returns,” says Guloien.) MFC has also bulked up its private equity and debt operations, as well as agricultural unit Hancock Agricultural Investment Group, which has been investing in crops like cranberries and almonds. The company has also generated impressive returns on geographic strategies. “Our China fund is up 40%, and our Europe fund is up 25% last year. We're not afraid to make big country bets,” says Guloien.

So how do you make sure this big investment machine keeps running smoothly? That's where management tip No. 2 comes in: Be demanding and consistent, to the point of being repetitive. According to Guloien, it's the only way to get everyone on the same page. “If I come into a meeting room unannounced and someone is doing an impersonation of me and they're saying, 'Oh, he's going to do this, he's going to say this,' that's a positive thing,” says Guloien. “It says they understand my values. They know what I like and what I don't like. It means I don't have to be there everyday. I've exported my value set.”

In an organization the size of Manulife, it's key that Guloien knows how to communicate his expectations. The company now sprawls across nineteen countries and territories and employs approximately 20,000 people. And there's more growth to come: in 1996 the company launched with a local partner a firm now known as Manulife-Sinochem Life Insurance, which has grown to become China's largest foreign insurer, with 17 city licenses. That business will be crucial for the nearly 120-year-old Manulife, a company first led by Sir John A. Macdonald, if it is to continue flourishing in this century. “The China deal is very long term. Most of us will be retired when the real benefits blow in,” says Guloien. “But that's the way it's supposed to be when you're investing for the long term. The short term falls in place. It's almost simple.”