NGS Super chief investment officer Ben Squires wants to elevate the fund to become the “number one” pension provider when it comes to investment performance, betting on deeper in-house capabilities and enhanced data access to get there.

The $16 billion education industry fund’s MySuper option was the third-highest returning balanced option – defined as having 61 to 76 per cent of investments in growth assets – in the year to 31 December 2025, according to SuperRatings. But the option’s 10-year return was 7.4 per cent, just matching the median return among balanced funds.

Squires, who has been with the fund for more than 17 years, says the fund’s ambition is not just reaching the top quartile in terms of investment performance, but leading the rank.

“We’re seeking to be number one with a significantly lower risk profile, high absolute returns and a very attractive Sharpe ratio, so that we can really deliver that value to members,” he tells Investment Magazine in an interview from the fund’s Sydney office.

“I don’t think you can do it by outsourcing, whether it’s an outsourced CIO model or it’s an outsourced asset consulting model. You’ll only ever get average outcomes, because you’re not developing internal capabilities and IP. You need to get close to the source data. It’s the only way you make informed decisions.”

Earlier in its journey, NGS Super relied on a fully outsourced and consultant-driven investment process which has now evolved to a “hybrid” set-up. NGS Super currently manages around 14 per cent of its assets in-house, while still using JANA as a consultant on equities, government bonds and corporate bonds, and Albourne Partners for hedge fund strategies.

NGS Super also runs an internal tactical asset allocation program which has a higher-than-average excess return target compared to peers.

“Most funds who have these programs typically target 25 basis points. Our target is 50 basis points, and we’re delivering much higher than that from our TAA program,” Squires says, recalling that during the Liberation Day episode last April the fund added 100 basis points of excess return with a large proportion attributable to defensive TAA hedges.

“Going into that, we had a non-consensus view to start, and that was we had a higher probability of recession occurring,” he says. “Through our TAA program, we had a series of hedges in place, and when Liberation Day hit, the value of those hedges materially appreciated, and we monetised those hedges.”

“We might have had an equivalent physical exposure to equities as our peers, but our effective exposure might have been six or seven per cent less than our peers through the use of derivative instruments.”

Squires says while other investors treat geopolitical risks as an exogenous shock, NGS Super “embed it in everything that we do”. This prompted it to start considering the impact of de-dollarisation early and led to the incorporation of gold in its portfolio in 2020 – before other asset owners like the Future Fund made the pivot, Squires points out.

“We think of ourselves as a ‘super hedge fund’, where we’ve got these long-term, secular-based trends playing out in our portfolio, but at the same time, we’re nimble like a hedge fund, so we navigate a lot of cross asset volatility quite well.”

Building the data foundation

A few years ago, NGS Super completed what Squires calls the “bedrock” to scale internationalisation, which is learning to understand the connections between various unstructured data sources such as Bloomberg, index, custodian, regulator and peer data. The fund is doing that via artificial intelligence models like neural networks.

It is also using AI to understand where it stands in terms of investment performance among peers – and why. While absolute returns matter, members tend to compare super funds in terms of relative returns, Squires says.

“We have regression models, we scrape data from other funds, and we look at the relative change in our return – what’s driving our returns, and how different is it from the marketplace?” he says.

“For example, how much FX hedging do we have if the Australian dollar moves? How sensitive are we relative to the other super funds in the market? Because that’s a good signal around the level of risk that we have.

“We’re very confident with how we’re able to now translate data that we have into valuable insights… We have the best statistics in the market.”

The next step is creating visualisation tools that will efficiently map out the connections within this wealth of data.

“Within our quant research team, we’ve got a number of PhDs with backgrounds in machine learning to bring that data to life through neural graph networks and things like that,” Squires says.

“The key message that I go back to the investment committee and the board with is that there’s no finish line.

“Knowledge is only a temporary state, and we need to keep evolving our knowledge as things change.”