Following a review of its strategic asset allocation (SAA) the $1 billion AvSuper will boost its alternatives portfolio by making its first allocation to global infrastructure.
The fund’s investment committee has resolved to invest up to 5 per cent of fund assets in infrastructure and is working with asset consultant Russell Investments to research managers. However the AvSuper board is yet to ratify the strategic move. The chief executive officer of AvSuper, Michelle Griffiths, said the board should decide on the matter before the end of August but that a search for the most appropriate opportunities was underway. “We’re still at the listed versus unlisted debate, and are looking at both domestic and international,” Griffiths said. The allocation will be made at the expense of the fund’s property holdings. Griffiths said the diversification benefits that infrastructure could provide within AvSuper’s alternatives book and the potential for attractive returns were the major reasons behind the decision. The feasibility of investing in infrastructure was identified during the fund’s annual review of its SAA. The introduction of a 5 per cent global infrastructure allocation was the only modification to emerge from the review. In the alternatives space, AvSuper already allocates 5 per cent of its assets to hedge funds and 15 per cent to listed and direct property combined. Across the broader portfolio it allocates 30 per cent to international equities, 30 per cent to Australian equities, 13 per cent to global fixed interest and 2 per cent to cash. Meanwhile, AvSuper appointed Christin Turnbull as administration manager earlier this month, to supervise the administration of the fund and monitor its outsourced administration and insurance service providers IBM SuperLife and ING Life. Turnbull joined from ComSuper, where she worked as a project coordinator, after entering the industry through the Super Cadets program in 2006.
Future Fund chief investment officer Ben Samild said that FY24 has been a great year for alpha creation, thanks to strong returns in equities and, unusually, across multiple hedge fund strategies all at the same time. He reflected the past few years have been “a difficult time to be an asset owner and to generate positive returns for risk assets” but the Future Fund is tracking well of its long-term mandate.
Simon Hoyle and Darcy SongSeptember 4, 2024
