The tumultuous upheaval at logistics software company, WiseTech, highlights the key role being played behind the scenes by the $342 billion AustralianSuper as one of the country’s largest equity investors.
As the revelations about the personal life of WiseTech founder and major shareholder, Richard White emerged – at one point almost daily – AustralianSuper was one of the key shareholders consulted by WiseTech chair Richard Dammery.
With its holding of 2.8 per cent in the company, a stake worth more than $920 million, the super fund is the largest Australian shareholder in the company independent of the WiseTech “family”.
It is the second-largest institutional shareholder overall, after US index fund giant Vanguard which holds 4.9 per cent.
While AustralianSuper’s representatives met with the WiseTech chair, the fund refused requests to make media comments during the process.
But when the deal was done for White to resign as chief executive and step back into a long-term role as a consultant, the fund put out a statement backing the move.
In carefully chosen words, which made both its role and its view of the events which played out very clear, the AustralianSuper statement confirmed that it had been engaging “extensively” with the board and management of the company for two weeks before White’s resignation.
It said it supported the move by the WiseTech board to “engage appropriate experts to review the specific issues raised”, and the decisions taken by the board.
It followed up with a strong endorsement of the company, declaring the company has a strong “long term value” proposition.
“We remain a long-term investor in WiseTech and consider its long-term value proposition as strong,” a spokesman said.
Positive responses
The statement was one of several positive responses to the news which sent the company’s share price- and the value of AustralianSuper’s holding- soaring.
At the same time, the fund was also keeping a close eye on the reputational issues surrounding ASX listed lithium and iron ore miner, Mineral Resources, following allegations that its founder and chief executive, Chris Ellison, had evaded taxes using companies in the British Virgin Islands.
While its holding of around five per cent was a much smaller investment than in WiseTech, worth around $35 million, its handling of the reputational issues around MinRes are also instructive of its approach as a significant shareholder.
The fund quietly cut its stake in the company from 5.1 per cent to 4.89 per cent as the shares fell in the wake of the news of Ellison’s alleged tax evasion and subsequent news that the company was being investigated by the Australian Securities and Investments Commission (ASIC).
News of the sell down emerged as a result of an ASX notification of its ceasing to be a substantial shareholder with more than five per cent of the company.
In response to media questions, the fund also said it was engaging with the MinRes board and assessing its long-term holding in the company.
In both cases, AustralianSuper’s behind the scenes voice to the board has been important, given its role as Australia’s largest super fund, and in many cases, the largest or one of the largest Australian institutional investors in ASX listed companies.
The $176 billion Aware Super, which is the second largest Australian institutional investor with 1.18 per cent of WiseTech, did not go to the same extent of issuing a public statement backing the deal and the company’s long-term potential but it revealed that it was also having discussions with the board to understand the causes of the problem with the powerful founder, and the board’s succession planning.
The WiseTech and MinRes issues events follow AustralianSuper’s controversial role in 2023 in the takeover bid for ASX listed energy company, Origin, when it was a key player in thwarting a $20 billion bid by Canadian investment giant Brookfield, and US investment firm EIG, for the company.
Good deal for shareholders
The offer was a good deal for shareholders, priced above the original market price, and was accepted by the board, led by chairman Scott Perkins.
Many shareholders including Australia’s second largest super fund, Australian Retirement Trust, were happy to take the profit and move on.
But AustralianSuper had a different view – wanting to keep Origin as a publicly listed company but also taking the view that it would be worth more than the offer price over the long term and calling the proposal a “low ball” offer.
It was a view which put it at odds with the board and saw it move to become a player in the process, increasing its stake to 17 per cent to a point where it could work with other investors to block the deal.
Despite it taking the opposite view of the board, by all accounts it appears that AustralianSuper was able to hammer out a constructive relationship with Perkins and the company, with indications that the super fund could be prepared to provide more financial help for its energy transition plans.
Explaining its opposition to the takeover offer, the fund said it “believes Origin has a highly strategic portfolio of assets to participate in, and for members to benefit from, the energy transition.”
“We have never wavered in our belief that the value and future value of Origin is better in the hands of members and other shareholders rather than a private equity consortium seeking to make a quick return based on the proposed scheme terms and we are pleased that this is the outcome.
“With the shareholder vote now finalised, we are looking forward to working with Origin’s Board and executive team as they look to execute their strategy and ambition to lead Australia’s energy transition.”
Important players
Australian super funds are well known these days for taking an active role in companies in areas such as gender diversity on the board and a company’s policies on climate change, but a handful are becoming important players behind the scenes at crucial tipping points for companies on a range of ESG related issues outside their financial performance.
AustralianSuper is now an important shareholder in all the big banks, and other major companies including BHP, CSL, Woolworths, Wesfarmers, QBE, Transurban, Woodside, QBE Insurance and Computershare.
Both AustralianSuper and ART now attract half of the annual inflows into the superannuation system, making them increasingly powerful in having a say on the future of ASX listed companies.
To date, ART has taken a low-key approach, preferring to keep out of the limelight on its views, but AustralianSuper can be expected to become an increasingly powerful player behind the scenes in corporate Australia as its funds under management grow.
