In his first public comments since taking the top investment job at the $37 billion Brighter Super, CIO Damien Webb says that while the fund is looking to harvest operational or implementation alpha as it grows, he believes its smaller size already gives it natural advantages.  its smaller size already gives it natural advantages.

“Small to mid-market [private equity]? Absolutely. Queensland? That’s a big natural ecosystem for us, just like Stanford invests in its local ecosystem,” Webb told the Investment Magazine Fiduciary Investors Symposium in the NSW Blue Mountains. “I’ve got some views in Aussie shares and things, but certainly small caps, which others can’t do, and emerging markets – we should certainly be looking at that.”

Webb, formerly the deputy CIO and head of international at Aware Super, said that he had felt ready to make the move to be a chief investment officer, but was “ensconced”  in the UK and two thirds of the way through the fund’s business plan there. His oldest son beginning year 10 triggered a decision to move back to Australia to explore other roles rather than stay on in the UK through the better part of another decade.

“I’d made up my mind, being in the UK, that Australian superannuation was an incredible force that I still wanted to be part of, and that I wanted to stay with a profit-for-member fund.”

Webb joined Brighter Super in April, and was five weeks into the job when he spoke at the Fiduciary Investors Symposium.

“[Brighter] have a very clear sense of what they want to be and a very clear strategy. I really like the investment committee, very good peer-to-peer conversations. The investment team is small but senior, at about 16 people, and they’ve invested quite well in systems – more on the listed market side, and I’d like to see a bit more on the private market side going on.

“And they’ve got a very evolved independent investment risk function. So there’s certainly some strengths there and some directions I’d love to take it in future.”

Brighter is substantially smaller than Webb’s old shop which, following its SFT with TelstraSuper, manages in the order of $237 billion. He told the symposium that scale “is a continuum” and that while Brighter has already done a few mergers – it’s the result of the integration of LGIAsuper, Energy Super and the Suncorp superannuation business – it may yet do more.

“I think Brighter might do some more, we’ll see. But scale absolutely gives you bigger operating budgets, allows you to invest in systems and greater specialisation of your teams. You can go global.

“But on the flipside of that journey is that it does introduce a lot of complexity. It is a bit harder to stay joined up, you do tend to get more specialisation, which is great, but then you can fall into siloed thinking.”