As big super funds bring more and more of their assets in-house, they’re having to invest heavily into the software and systems that support the teams that will manage billions of dollars of assets internally.
The $170 billion Aware Super is now halfway through Project Odin, a three-year uplift of its internal investment platform that has seen the fund pull together software offerings from GoldenSource, ORTEC and BlackRock – and tonnes of data from its custodian, State Street – to better prepare it for life as a megafund.
“The project is a key enabler of our strategy, and it’ll allow us, as an investment team, to grow sustainably and safely in our quest to become a $250 billion plus fund with a larger internal footprint,” Michael Clavin, Aware Super head of income and markets, tells Investment Magazine.
“This platform will support that vision and give us the ability to incorporate data from our listed and unlisted assets into one single view, which is right now something we do not have.”
The Norse god Odin, for whom the project is named, had to sacrifice an eye to the giant Mimir in order to gain knowledge of the past, present and future. Clavin hopes that Aware won’t have to go quite that far, and says that despite the size of the project it’s been a mostly painless process and one that has reduced, rather than increased, the complexity of the fund.
“Odin simplifies our platform,” Clavin says.
“It streamlines it into a core operating platform that is basically eFront (for private assets) and Aladdin (for listed assets), centralises our data into (data management platform) GoldenSource and then allows us to report on the progress of our investment strategy through ORTEC, which is a performance attribution system.”
“What it’s going to give us is much better attribution on both our listed and unlisted assets. But the unlisted assets – the attributes we received from our custodian were fit for purpose, but they weren’t fit for purpose for a whole-of-fund risk approach. This allows us to get the attributions in a much more timely and accurate manner. That’s really important when you talk about being able to make investment decisions on trusted data in a timely manner.”
Most of the systems Aware is using are available to the investment team in the desktop environment, though GoldenSource and ORTEC run behind the scenes and aren’t accessible by everybody.
Aware has stated its ambition to manage 50 per cent of its assets in-house by the end of this year – it currently sits at around 35 per cent – but its internalisation efforts look somewhat different to those of some other funds, like UniSuper, which has focussed on in-house management of “heavy lifting” liquid asset classes while leaving more exotic asset classes in the hands of external managers.
“When we started our internalisation and system journey, which would’ve been 2015-16, we did primarily focus on just having a platform that supported listed assets,” Clavin says.
“When we looked at how our portfolio evolved over time, unlisted assets became a greater portion, managed both internally and externally. Getting that data, and robust data into a system that was co-mingled with our listed assets so that we can do things like total portfolio approach, whole-of-fund risk and extensive exposure management was seen as something we really needed to have to manage the fund effectively.
“Even if we didn’t do a lot of internalisation in the unlisted space, we would still need a system that allowed us to get the attributes of our unlisted assets into a core platform like Aladdin.”
The external technology market isn’t sitting still, nor are the markets in which Aware’s investment team plays. There’s always a possibility with a project like Odin that the systems implemented – and the purpose for which they were – could be past their use-by date by the time it’s finished.
“What really excites me about Odin is its capacity to improve and adapt,” Clavin says.
“We’ve picked systems and an operating platform that we think is robust to meet the future demands of the fund. They also meet the current demands of the fund, but what we’ve tried to do is future proof that to the best of our ability. I think the platform itself and the systems we’ve deployed allow us to adapt to changing demands both on the investment side and the technology side.”
Clavin says one of the biggest changes since Aware embarked on Project Odin is in the external technology market – especially in relation to things like AI.
“My view is that Odin places the fund to be able to exploit and capitalise on those changes, because what Odin is about is making sure we have the data from all our assets in one core system, allowing us to take that whole-of-fund approach – which I think is imperative to be able to utilise technologies like AI,” he says.
And the tariff-induced chaos in markets has only highlighted how important it is for big super funds to be able to respond quickly to market-moving news, Clavin says.
“In my view, this recent bout of market volatility is something we expect and have always expected,” he says.
“When we looked at the business case for Odin, we had to take into account how the system would help us make clear investment decisions in times of volatility. It validates what we already knew.”
