Last week, representatives from more than a dozen super funds, associations and asset managers flocked to Washington DC and New York for a landmark four-day summit intended to highlight superannuation investment in the economy of the United States and (hopefully) stay the imposition of heavy tariffs on Australian exports.
The summit – and the super funds that attended it – received a stamp of approval from US Treasury Secretary Scott Bessent, who said that the system was “fantastic, especially considering Australia had a population smaller than Florida or California”.
“That’s what I was struck by: the confidence you have in the growth is not what one might expect for Australia… your regularity, sustainability and trajectory are really preferable,” Bessent said.
The funds that popped up stateside – which include the likes of AustralianSuper, Australian Retirement Trust and Aware Super – have sought to highlight members’ best interests in their communications, while Super Members Council (SMC) executive general manager of strategy and insights Matthew Linden said that it was an opportunity for funds to “go into bat for members and to unlock the best investment deals for them”. IFM Investors has played a major role in the summit, while the Association of Superannuation Funds of Australia (ASFA) was also in attendance.
“The Australian Super Summit has been an important opportunity to position and build awareness of Australia’s superannuation pool of savings,” IFM Investors said in a joint release with SMC and ASFA at the conclusion of the summit.
“It has been a bid to create new investment opportunities for the millions of Australians who have investments in the United States through their super fund.”
Member metrics
But the initiative has come under question by the Senate Economics References Committee, with outspoken shadow minister (and super sector critic) Andrew Bragg issuing a detailed list of questions to funds who attended the summit.
The list of questions, seen by Investment Magazine, asks funds to provide total costs of their attendance, and whether a best financial interests duty (BFID) assessment or any return on investment calculations had been undertaken for the summit or participation in an alleged documentary that was made about it. Bragg also wanted to know who organised the summit, who invited the funds to attend, and why they did.
Some peers in the super industry have also questioned the member merits of the summit.
Investment Magazine understands that at least two retail super funds received invitations to the summit and were involved early in the process, but they struggled to justify the trip under the best financial interests’ duty (BFID).
Some senior retail fund sources viewed the trip as being dubious in and of itself – with one describing it as having the optics of “a junket”. At least two other retail funds did not receive an invitation and understood it to be an industry-fund-led initiative.
Notably, the $74 billion Mercer Super didn’t receive an invite despite its parent company being listed on the New York Stock Exchange, though one of its US-based leaders was invited to participate.
‘Deeper collaboration’
Other funds thought that their own relatively light allocations to private market assets meant their members wouldn’t benefit from an international summit centred on them in the same way that those of profit-to-member funds would.
Retail funds have historically had lower allocations to private market assets, while profit-to-member funds continue to tip more and more FUM into private equity and infrastructure, with much of their future investment expected to land in the United States.
According to modelling carried out on behalf of IFM Investors and the SMC and released just prior to the summit, the US attracts over one third of all private market investments that Australian super funds make overseas. Right now, that’s approximately $50 billion – but with “deeper collaboration”, the total could grow to $240 billion or more by 2035, with $110 billion of that invested in infrastructure assets like ports, data centres and telecommunications networks. The funds that attended invest a collective $631.6 billion into the US economy.
But members could also benefit from stability in trade ties between the United States and Australia, and it was the benefits of this stability that Treasurer Jim Chalmers sought to highlight – and preserve – in his speech opening the summit, saying that it would serve as a “powerful demonstration of the strategic and economic alignment” between the United States and Australia and that “longstanding trusted allies with shared interests make the best economic partners”.
“The US has enjoyed an uninterrupted trade surplus with Australia since 1952, currently two‑to‑one,” Chalmers said. “We impose zero tariffs on US imports. Around half of our exports are inputs into American domestic production processes. We can supply 36 of the 50 minerals the United States lists as critical – for advanced technology and defence… We are already one of America’s top 10 foreign investors. And we have trillions of patient, friendly pension capital ready to invest in the new opportunities that lie before us.”
The apparent success of the summit has already spurred the NSW Government to announce that it would hold its own superannuation summit in Sydney in the second half of this year.
