Acting chief executive of Media Super, Michael Rooney, is frustrated by the lack of data transparency of some of its service providers as the fund takes greater control of risk monitoring.
Rooney says the fund is in the process of obtaining more indepth investment information for its annual reports. This is part of a two-phase approach begun last March to move towards greater transparency for its members.
“We’ve recognised that transparency in investments is becoming a bigger issue. Members are taking a greater interest, especially as their account balances grow. And there’s a greater push from the regulators to be more transparent in the information you supply your members with.”
The super fund is collecting “sufficient information” to provide the top-20 holdings in each sector, such as property or private equities, in annual reports to members. It would also like to supply members with a complete list of where money has been invested and share ownership.
“The idea of that would be that we would put that on the web… we’d still have the top-20 summary at the front, but if you wanted the full details of all the Aussie equities we held, you could click on it and open up a PDF file, and it would give you that detail.”
But the process has proven difficult with some fund managers, he says. Fifteen of its 40 fund managers have supplied information but won’t allow Media Super to upload it online; three managers still haven’t produced any information for the super fund but have agreed verbally; while the rest have freely supplied information.
Rooney says the fund understands there are competitive sensitivities, so it advised fund managers it would collect the information twice a year –June 30 and December 31 – but will delay publication by four months.
“We wouldn’t mention who the investment is through. So, for example, you’ve got four Australian fund managers. We’ll add up all the BHP shares you own… but not the investment manager that owns them. So they couldn’t attribute any holding to a particular fund manager, it would just be a total of each holding.”
Rooney says the fund is still struggling to get this information and to get the first asset disclosure report up and running. It’s about two or three fund managers short of getting that information, he adds. “We’re still having some pushback from investment managers who don’t want to release the information because they think it’s sensitive against their competitors.
“But, unfortunately from our perspective, our members put a lot of money into these and they should have the right to know what’s been purchased with their money.”
Rooney says that, while historically it hasn’t been done, regulators and industry bodies have been advocating greater transparency, and it has long been a point of discussion at board level. Greater investment sensitivity is also a factor, including environmental and ethical beliefs.
“We think it will become the norm. Demand’s pushing that way,” he says.
“Last year we freely put in our executive [and directors’] salaries, details of sponsorships and so forth in our annual report. So we’re not just doing this against the investment guys, we’re looking at our whole fund and saying, what information should we be giving to our members? We should be transparent, what do members want to know?”
|Finding the full figures|
|Media Super is also moving towards stronger reporting through its custodian on investments where calls are made. Speaking at last week’s Investment Administration Conference, Rooney spoke about the challenges of chasing investment histories to obtain a full picture for members.“We wanted set up a more robust reporting mechanism to understand the return we’re getting, understand where we were with the payments, the call notices, when money was coming back, so we had a true record of how it was performing,” says Rooney.
However, the exercise has proven difficult when tracing older investments – namely, some of the older funds Media Super has taken over. “…At the time of the merger, we were giving a value of the day and the amount of calls that were still outstanding going forward. So we thought we really should get the history of those investments from the previous funds.”
Media Super went to the fund manager and asked for the information and found it’s been a very difficult exercise to get the historical information from them on some of those calls.
“So, while they were saying X amounts were outstanding, they couldn’t actually easily justify those amounts, which became quite difficult and quite frustrating, and we’re still negotiating even now. This project [was] started some 19 months ago, but there’s still one fund we’re working with to try to get the full figures.”