Gary Gabriel (L) and John Livanas (R) (Photo: Tahn Sharpe)
Gary Gabriel (L) and John Livanas (R) (Photo: Tahn Sharpe)

EXCLUSIVE

State Super has named a former HESTA senior figure as its new CIO, following Richard Hedley’s departure from the $43 billion fund in December after a management restructure.

Gary Gabriel, who was previously general manager of strategy and portfolio risk at industry fund HESTA, will officially take the reins on February 4th.

At the same time, State Super’s current general manager of asset allocation, Charles Wu, has been appointed to the newly created roles of general manager, defined contribution and deputy CIO.  Both appointments were made after an extensive executive search according the fund.

State Super chief executive John Livanas said Gabriel had more than 20 years’ experience in institutional investment roles, formulating, implementing and communicating investment strategies across multi-asset class portfolios.

“Gary has a proven track record in managing superannuation investment portfolios through market cycles,” Livanas added. “He also has a deep understanding of investment markets as well as actuarial and defined benefit issues.

“Gary’s specific experience of a total portfolio approach (TPA) – which TCorp has adopted – defined-benefit schemes and private markets cemented the decision to appoint him as investment chief.”

Gabriel’s appointment follows his three-year stint as general manager, portfolio strategy and risk, and acting CIO at HESTA, plus four years at Wilshire Associates as managing director. Before that, he spent four years at the Future Fund heading up private markets.

SAS Trustee Corporation is trustee for four funds that collectively go under the brand name State Super: State Authorities Superannuation Scheme (SASS), State Superannuation Scheme (SSS), Police Superannuation Scheme (PSS) and the State Authorities Non-contributory Superannuation Scheme (SANCS).

The assets of all four schemes have been combined into the STC Pooled Fund – one of the country’s largest super schemes, with more than 100,000 members.

Unlike most super funds, which have the benefit of significant positive net contributions, State Super has negative cash flow, having been a closed defined-benefit fund since 1992; however, given the size of its pensions and assets, State Super will remain a large fund until the last member leaves in about 2084.

Livanas pointed out that State Super is meeting the challenges of having to pay out a significant amount of pensions while also achieving high returns.

“That means we have to run things in a very different way,” he said.

“In terms of the smaller defined-contribution fund,” he added, “we have a shorter time horizon. This means that we have to run the fund nimbly and be able to defend our position in down markets.”

The State Super boss went on to say that the current trend – in which super funds are bringing more of the investment function in house – might be sensible for large funds with a long time horizon, but State Super made the decision to focus on risk management and investment strategy and work closely with providers that have specific expertise, such as TCorp and Mercer.

Elizabeth Fry has been a financial journalist for more than 25 years and has written for a number of publications, including CFO, The Financial Times and The Australian Financial Review.