Energy Super’s initiative in placing portfolio holdings on its website ahead of APRA’s July 2015 deadline, will help frame the debate around what should be disclosed, says leading superannuation economist Sacha Vidler.
The $5.4 billion fund has published the name and size of its equity and fixed income holdings, as well as listing individual property and infrastructure holdings, but it has refrained from disclosing individual investments in private equity or in the single Black Rock hedge fund it invests with.
The extent of portfolio disclosure that superannuation funds are obliged to give their members will be determined by the long awaited response to the government consultation launched in November 2013.
The Better regulation and governance, enhanced transparency and improved competition in superannuation consultation called for an appropriate balance to be struck between improved transparency and compliance costs.
Dr Sacha Vidler, principal at Vidler Policy and Research, welcomed the pragmatism of Energy Super’s move, as a way of shifting the discussion out of a tense negotiation between industry and government.
“If trustees determine it is in the members’ best interest to provide full investment disclosure then it will happen over time,” he predicted.
And he foresaw such disclosure as essential for engagement as the superannuation system matures.
“If members with substantial asset holdings can’t get confidence from their trustee, they will move to SMSFs,” he said.
Energy Super has reported the main feedback from members to its disclosure as being the pleasant surprise that their fund was invested in well-known landmarks in Queensland such as the Gold Coast and Townsville Airports and key Brisbane office buildings.
It foresees the information as fostering greater engagement with the fund’s 49,000 members.
Vidler thought trustees would ultimately benefit most from the disclosure.
“They will get all the asset pricing and portfolio information from all of their fund managers, but only provide a consolidated list to the members. To the extent that fund management is purely an intellectual property business, a well organised trustee will be able to learn everything about their fund managers’ methods in fine detail.”
Key findings from Energy Super’s disclosure show that its international equities exposure has taken a diverse range of bets. Its biggest investment being financial services company Wells Fargo ($17.8 million), followed by oil services firm Schlumberger at $14 million, advertising agency WPP $11.7 million and IT firm Oracle at $11.4 million
In fixed income, its most notable holding is a high yielding $17 million allocation to Mexican government bonds, its third largest bond investment after Commonwealth government and Queensland treasury bonds.