The one certainty about superannuation over the next 20 years is that it will grow. It’s the miracle of compound interest plus a legislated minimum of the flow of foregone wages every week. The structure of the industry, either through evolution or new regulation, is a little more difficult to predict. There will be fewer but larger funds, perhaps even more SMSFs [when will they stop growing in number?] and perhaps fewer managers. The influence of sponsoring organisations, such as unions and employer bodies, may wane – with or without possible legislative change to the make-up of trustee boards – with the sheer size of funds and continued push for professionalism and best practice. Adequacy will have been addressed, or at least debated. Paul Howes, one of the industry’s new faces of the past couple of years, says that super adequacy will be the next big discussion.
Most doomed to straitened old age
Many Australians are heading for a less than comfortable retirement unless the federal government moves to increase the Superannuation Guarantee, after new research revealed there is a big hole in what we have saved and what we will need for a comfortable retirement, writes JOHN BROGDEN
Lifecycle strategies are no dead dog
You can’t be sure of too much in life, but when the AIST, ASFA, IFSA and The Corporate Super Association all think an idea is a dog, then that idea really should be checked for fleas. The four peak bodies, so often at loggerheads with one another, produced an unprecedented joint submission to Jeremy Cooper’s Super System Review last month. They noted that when Senator Nick Sherry announced the Review in May 2009, he said its panel’s task was to “renovate the house”. The four bodies fear that with its proposal to divide members into “universal” and “choice” participants, the review in fact wants to tear the house down and start again. (I wouldn’t ask Nick Sherry about it, though – he has sooo moved on from old policy relationships.
Lifecycle strategies are no dead dog
You can’t be sure of too much in life, but when the AIST, ASFA, IFSA and The Corporate Super Association all think an idea is a dog, then that idea really should be checked for fleas. The four peak bodies, so often at loggerheads with one another, produced an unprecedented joint submission to Jeremy Cooper’s Super System Review last month. They noted that when Senator Nick Sherry announced the Review in May 2009, he said its panel’s task was to “renovate the house”. The four bodies fear that with its proposal to divide members into “universal” and “choice” participants, the review in fact wants to tear the house down and start again. (I wouldn’t ask Nick Sherry about it, though – he has sooo moved on from old policy relationships. Private debt’s double-digit returns strut their stuff
An asset class that offers combination of competitive returns and capital preservation must be attractive to investors. Add to that a debt portfolio with senior secured collateral backing and it’s understandable why private debt has something concrete to offer the investment community, write MIKE DAVIS and TIM MARTIN.
Van Eyk adds Cohen & Steers listed infrastructure
Van Eyk Blueprint Series funds has reviewed its allocation to infrastructure and redirected funds to Cohen & Steers, a large USbased listed infrastructure fund. Jacqui Lemon, product manager for van Eyk Blueprint Series, says van Eyk had moved from the Macquarie Infrastructure Fund to New York-based Cohen & Steers global listed-infrastructure fund. Van Eyk’s infrastructure allocation is $67 million, of which 10 per cent will be directed to Cohen & Steers. “We reviewed our allocations, and decided on Cohen & Steers due to our conviction in the competitive nature of C&S’s bottom-up research,” Lemon said.
Van Eyk adds Cohen & Steers listed infrastructure
Van Eyk Blueprint Series funds has reviewed its allocation to infrastructure and redirected funds to Cohen & Steers, a large USbased listed infrastructure fund. Jacqui Lemon, product manager for van Eyk Blueprint Series, says van Eyk had moved from the Macquarie Infrastructure Fund to New York-based Cohen & Steers global listed-infrastructure fund. Van Eyk’s infrastructure allocation is $67 million, of which 10 per cent will be directed to Cohen & Steers. “We reviewed our allocations, and decided on Cohen & Steers due to our conviction in the competitive nature of C&S’s bottom-up research,” Lemon said.
Where to invest: back to the future with a ‘nifty fifty’ environment
The world is becoming pedestrian, it seems, and in such an environment super funds need to consider their strategies. Do they want to walk with the masses or run their own race? Bear in mind, in investment terms, running your own race is not often a great idea. Pedestrian, as dull as it sounds, has usually been best over about the past 30 years. But, according to Martin Currie Investment Management, the next five to 10 years will be charactered by restrained average returns, but perhaps with even more volatility. The western world will continue to unwind its debt over several years. Instead of leverage adding about half a per cent to annual GDP, de-leveraging will subtract about half a per cent.
Focus hedge FoF and advisory sets up shop in Australia
Focus Investment Group, a New York-based hedge fund-offunds and advisory firm which has been investing in Australia since 2003, has appointed an Australian and regional representative. Colin Taylor, who was the head of UBS prime broking until midway through last year, will represent Focus through his recently established Sydney-based CT Global Advisors, marketing to and client servicing Australian funds as well as those based in Hong Kong and Singapore.
CalSTRS expands active/passive decision making
CalSTRS will double the ranges of its active/passive global equities allocations in a bid to enable investment staff to allocate funds tactically across active and passive rather than be forced to rebalance to strategic asset allocations. At the February investment committee meeting, CalSTRS concluded its active/passive review of global equities and fixed income – which took nearly nine months – recommending moving the active/passive bands for the US and non-US segments of the global equity portfolio to 10 per cent, while keeping fixed income at the same ranges.
Get ready: it’s time for TOFA
Superannuation and other large investment funds should now be prepared for imminent changes to tax law – the Taxation of Financial Arrangements (TOFA) legislation – and know the impacts it will have on their backoffice operations and investment returns in the future. TOFA aims to align taxation more closely with the commercial recognition of gains and losses, and requires super and investment funds with more than $100 million under management to keep accurate transaction records for assets defined as ‘financial arrangements’ – typically debt instruments and derivatives – in which taxpayers have the right to receive, or have an obligation to provide, a financial benefit which can be settled in cash.
All grown up now: Sunsuper pulls $1.3b from AMP Capital and backs itself
Sunsuper’s increasing scale and investment team enabled it to pull a $1.3 billion multi-manager international equities mandate from AMP Capital Investors and back itself by splitting the redeemed money among five managers. The $15 billion super fund withdrew the long-standing mandate with AMP Capital Investors’ core international equities fund [a multi-manager product in the Future Directions Funds (FDF) stable that is co-advised by Mercer Investment Consulting] and allocated the money itself in five customised mandates, giving it ownership of individual securities, more control over tax events and clearer visibility of the effects of currency movements, David Hartley, chief investment officer at Sunsuper, says.
