Ryan Riedler, head of ASX core strategy, Australian equities at Cbus, says the fund will look to generate alpha locally through engagement and that internalisation will help it strengthen its connection with other market participants, as well as its brokers and service providers.

While Cbus has been internalising existing strategies since 2017, in 2025 it turned its eye toward something different; building a brand new internal Australian large cap strategy.

“It was a great opportunity to start a strategy from scratch,” Riedler tells Investment Magazine. “It’s not often that you get the chance to do that. It’s entirely consistent with Cbus’ ambition to have more sophisticated internal investment capabilities, at least as they relate to domestic equities, and it’s also well-resourced.”

Riedler joined Cbus after 13 years at Cooper Investors and as the fund moved past 35 per cent internalisation, with most of the systems needed to kickstart a new strategy already in place

“All those hygiene factors you want to see when you’re starting a new strategy were there, and that was a real positive. And when you look externally for the boutique fund managers you can see there’s a lot of real pressure out there on fees and FUM; whereas at a super fund, their tailwinds and the journey they’re on, that’s a really good starting point.”

The strategy is benchmarked to the ASX100 but can invest across the ASX200 and NZX50, Riedler says, adding that there are “some great companies across the ditch”. While still of “modest” size now, the strategy is expected to scale with the fund and become a more substantial part of Cbus’ domestic equities portfolio. The team are fundamental bottom-up investors, but don’t ignore the top-down view: stocks “don’t live in isolation”, Riedler says

“A good example is Commonwealth Bank. A lot of the bottom-up analysis a few years ago would have said that you need to be underweight – revenue growth is tough, cost outs are a real pressure… and there’s regulatory imposts as well. And you would think that would have been right. But the top-down view would have also said that look, there’s passive investing flows going into the sector, which has supported the stock.” 

For many shops, active management in Australian equities hasn’t been the most rewarding pursuit in recent years, with underweights to banks and overweights to healthcare hammering performance. But Riedler thinks Cbus’ edge will come not only from selecting stocks but also engaging with company management teams; later this month, he’ll head to Perth to meet with some of the largest listed miners.

“Where we see the ability to take alpha is by being able to really drive engagement with the companies. AI can’t go and meet with the companies, it can’t go and do a lot of the competitor visits that we can do. Those networks and that engagement are going to be a key point of differentiation for us.”

“I think we can look at ourselves as genuine long-term investors. Yes, there might be shorter-term performance expectations, but I think that’s a really key point. We have the ability to engage deeply with the companies that we invest in, and not just the management, but also the board and directors. We have a budge to be able to travel and visit companies and wear out the shoe leather.”

Riedler thinks that internalisation is also a boon not just for bringing down costs and having a greater connection to the assets it invests in, but for developing Cbus’ connection to the other market participants with which it interacts every day.

“Cbus can also build relationships with the various entities, whether that’s from an equity long-term capital provider [standpoint], whether it’s from debt markets. It also helps with the relationships with the brokers and service providers that we have as we become larger.

“And then, I think it’s also just within the organisation, the ability to join the dots and share information between the various systems – so there are some specific benefits, but some broader company-wide ones as well.”