Fresh from a big technology overhaul, Cook Islands National Superannuation Fund is ready to start diversifying its portfolio as risks grow in the US market. Its small size and remote location mean it lacks the advantages of some Australian funds, but CIO David Brown says that going to work in a Hawaiian shirt is still “pretty cool”.
The $365 billion AustralianSuper is taking a “wait and see” approach to macro uncertainty but continues to favour international equities over domestic due to scepticism around valuations.
The superannuation industry has largely mastered accumulation, at least from an investment perspective. Now, as a wave of employees emerges from the dressing room of compulsory accumulation onto the playing field of retirement, funds are grappling with the challenge of how to help members spend safely and confidently in retirement when no one knows when the full-time whistle will blow.
The biggest industry and profit-to-member funds are benefiting from an incumbency effect in retirement, with accumulation members sticking with them as they head towards drawdown. But funds have yet to conquer the problem of delivering retirement solutions.
Less than six months ago TelstraSuper and Equip Super said their due diligence process had convinced them there were substantial member benefits in a merger. But now TelstraSuper has withdrawn, saying that those benefits are unlikely to be achieved. Its withdrawal raises questions about the long-term sustainability of both funds.
Michael Clancy will preside over the circa $93 billion Rest Super’s 140-strong investment team as it looks to grow its membership and assets under management over the next decade. He is expected to bring a managerial bent to a role that has often had a pure investment focus.
Infrastructure and international equities will play a more prominent role in Australian Retirement Trust’s default investment strategy given higher expectations for inflation and volatility. The changes affect eight of 15 investment options, including the High Growth Pool which accounts for the bulk of its 2.4 million members.
When it comes to investment internalisation, it’s not just about making sure you’ve got the right remuneration to attract star stockpickers. The build out of operational infrastructure and incentivisation of the staff that run it will also be key determinants of success.
The $320 billion Australian Retirement Trust (ART) plans to double the size of its team in London by the end of the year. Michael Weaver, ART general manager of mid-risk assets and UK, says its approach will be low-key, hiring locally can be prohibitively expensive, and the cultural fit of staff located in a far-flung office is as important as the talent they bring.
Long-term investors like pension funds and sovereign wealth funds feel that they are becoming more vulnerable to risks like geopolitics and regulatory change despite a belief that they will be highly resilient against them in the next 12 months.
With its offshore footprint and extensive research capabilities, Mercer Super has a lot of advantages that small funds don’t. Still, scale can bring complexity – and new CIO Graeme Miller says he’s staying focused on super’s “unambiguous” purpose to prevent that complexity from constraining returns.
Politics, well-meaning but over-zealous regulation and the bureaucratic nature of superannuation governance means the system isn’t doing everything it can to grow and protect the retirement savings of its members.
The investment intelligence behind Australia’s largest asset owners and their teams
In-depth interviews with leaders, experts and visionaries in the institutional investment community
Updates on the latest industry policy developments and regulation
The challenges and innovations of custody, technology and operational due diligence
Investment Magazine provides in-depth, monthly analysis of trends and developments for all the businesses in which superannuation funds engage‚ including asset allocation, investment manager selection, custody and fund accounting, member administration, group insurance and compliance.
We acknowledge the Traditional Custodians of this land upon which Conexus Financial sits, the Cadigal of the Eora Nation. We recognise their continuing connection and unique cultural and spiritual relationships to the land, waters and community. We pay our deepest respects to them and their culture, and to Elders both past and present.
