The merger of Sunsuper and QSuper created a behemoth organisation with $230 billion of assets under management and over two million members, giving the fund significant financial firepower to plan for members’ retirement.
Speaking at Conexus Financial’s recent Fiduciary Investors Symposium last month, Don Luke, chair and Bernard Reilly, chief executive of Australian Retirement Trust (ART) said the fund is in a good position to make bigger investments and quicker decisions.
“I think you’re able to write a bigger cheque, I actually think what we’re able to do is to harness the resources and make a decision faster than we otherwise would have,” said Reilly. “We need for the money to work as quickly as we can in that regard.”
The merger of Sunsuper and QSuper created Australia’s second largest superannuation fund, which receives annual inflows of between $10 billion and $15 billion.
There is a growing trend among some superfunds such as AustralianSuper, Aware Super and UniSuper to set up in-house team to internally manage investments. However, ART is happy to continue to work with external managers said Luke. “I think the default position is reasonably natural that if you don’t have an internal team, you’re more likely to be able to find a world class, external team, than to create an internal team.”
“So I would have thought internalising is quite a strategic change and needs to be thought through very deeply and very well. And you need to test who you can recruit, how you’re going to do it, what systems,” he said.
The key focus for ART is to help its members plan adequately for retirement said Luke. “[Members have] live their whole life earning income, they want income in retirement. So it’s up to us to produce that income,” he said. The fund is in the midst of appointing a head of retirement to work with the product team to develop appropriate retirement solutions for members.
Making an impact
ART investment decisions are shaped by the fund’s climate action plan amid the global economy’s rapid transition away from fossil fuels.
“While we may have a safe, sustainable, socially responsible option, it impacts every investment that we make,” said Reilly.
However, he noted it is important to acknowledge the energy transition will not be linear. “I think we all need to acknowledge that it is not a straight line from where we are today to where we get to in 2050, or 2030, or 2040.”
Luke also believed ART will expand further into impact investing as a significant segment of its members are quite a way from retirement. “[Our members] are emerging into a world that needs to be vibrant. And it’s up to us to create and do that, but not ideologically, to their detriment, rather creatively and cleverly, to their benefit twice.”
But he recognised ART has not been a market leader in investing in social assets but is determined to change that. “I think we need to get to the social…we have HESTA here and Aware and others who lead in this space as many other funds have. We haven’t been amongst those leaders and we need to be.”
“I think we need to solve problems together for our community and our society, [while] never ever, ever, compromising our fiduciary duty, and ensuring that we create wonderful outcomes for our members.”