The drive for superannuati on reform has shifted gears: new polici es have been committ ed to, and the gritt y work of imp lementati on is under way. It’s essential that the Stronger Super panel, set up to advise the Government on making MySuper, SuperStream and better trustee governance a reality, achieves consensus in this crucial stage. Can this be done? And what do these far-reaching changes, in addition to the forces of consolidation at play, mean for the future of the peak bodies representing the industry? SIMON MUMME and PHILIPPA YELLAND report.
The small-cap effect in PE – different but worthwhile
When Kevin Kester was running a US$4 billion private equity and real estate portfolio for the big Colorado Public Employees Retirement Fund a few years ago, he became aware of how difficult it was to invest in smaller companies. This was a bit frustrating because he was also aware that the small end of the private equity market seemed to be less efficient than the large end, and exhibited different characteristics. For instance, unlike the public markets, smaller private companies tend to trade at lower price:earnings ratios than their larger counterparts. This allows potential purchasers the ability to buy cashflows for less money. With less money at stake, there is also less pressure to leverage the businesses in order to get target returns of 20 per cent or more. Life under the macroscope
The major investment themes for this year, according to a report from MLC Investment Management, were meant to be the ongoing “muddle-through” global recovery, sovereign debt blues and China’s slowdown. The risk of asset bubbles in Asian equity and property markets, and in commodity markets and economies, were also highlighted. But this was before March. MLC’s note was current enough to forecast the impacts of the summer floods on the Australian economy, but not the civil strife in the Middle East. Nor the 9.0 Richter Scale earthquake and tsunami that devastated parts of northern Japan. Loans market heats up on duration fears
While traditional bond portfolios were still attracting a lot of institutional money – more than any other asset class in 2010 – concerns about prices, volatility and duration were prompting more interest in alternatives such as loans. Paul Hatfield, CEO of loans and mezzanine debt specialist Alcentra, said there had been high levels of inquiry in the loans market since last December. “Loans solve the duration issue,” he said, because investors make money whether interest rates rise or fall.
UBS small cap stars bound for incubator
Two of the three portfolio managers from UBS Global Asset Management’s Australian small caps team are understood to be in advanced discussions with a boutique incubator.
Private equity consultancy seeks partner
The private equity consultancy which broke away from Wilshire Private Markets last year is considering putting on a fourth partner, after raising five mandates from four institutional investors.
Uncomfortable talk for fund CIOs
As uncomfortable as it may be to admit, super funds have agency risk internally as well as externally. This is one of the contentious topics to be discussed at the second Fiduciary Investors Symposium in Manly next month.
Join a Dysfunctional market discussion
The Paul Woolley Centre for the Study of Capital Market Dysfunctionality will hold a half-day workshop for super fund executives, managers and academics at the University of Technology Sydney on May 12.
Pillar Administration gets twofer from competitor
Peter Beck
IFM hunts sales exec to launch new office
Industry Funds Management (IFM), the $28 billion asset manager owned by 33 not-for-profit superannuation funds, is searching for a distribution specialist to open its next office outside of Melbourne.
UniSuper beams more capital into global tech
UniSuper has invested more than $200 million in a second mandate focused on global technology stocks as it searches for alpha in equity markets worldwide.
Private equity stuck in the doldrums
The global rate of private equity fundraising remains at its slowest since 2003, however there are some positive signs for the asset class with more general partners holding interim closes on funds during the first quarter of 2011.
