The investment horizon for super funds has expanded far beyond the traditional asset classes of stocks and bonds. The proliferation of complex alternatives such as hedge funds and private equity is driving a trend towards specialisation in the investment consulting industry as consultants look to allocate research resources more effectively. KRISTEN PAECH reports.
New role for “growthy” credit
At a recent Mercer Investment Forum in Sydney, a straw poll of the audience revealed that more than half would invest in opportunistic credit if given $1 million to invest in just one asset class. The vote followed a debate between four Mercer experts, who argued their corner on four different asset classes – private equity secondaries, opportunistic credit, insurance linked securities and gold. KRISTEN PAECH investigates the credit frenzy and the new role it’s playing in super fund portfolios.
New role for “growthy” credit
At a recent Mercer Investment Forum in Sydney, a straw poll of the audience revealed that more than half would invest in opportunistic credit if given $1 million to invest in just one asset class. The vote followed a debate between four Mercer experts, who argued their corner on four different asset classes – private equity secondaries, opportunistic credit, insurance linked securities and gold. KRISTEN PAECH investigates the credit frenzy and the new role it’s playing in super fund portfolios.
The end of the world is nigh … or is it?
The funds management industry is in trouble. Of that there is little doubt. Head count among the major managers has been cut by at least 10 per cent, according to a Watson Wyatt report last month. Among hedge fund managers, the head count is down an average 20 per cent. And the worst is yet to come, from the funds managers’ business perspective. The Watson Wyatt report says that funds managers started the year with a revenue ‘run rate’ down at least 30 per cent on the start of last year and they were looking to cut total costs by 20 per cent.
The end of the world is nigh … or is it?
The funds management industry is in trouble. Of that there is little doubt. Head count among the major managers has been cut by at least 10 per cent, according to a Watson Wyatt report last month. Among hedge fund managers, the head count is down an average 20 per cent. And the worst is yet to come, from the funds managers’ business perspective. The Watson Wyatt report says that funds managers started the year with a revenue ‘run rate’ down at least 30 per cent on the start of last year and they were looking to cut total costs by 20 per cent.
More than tax breaks needed for big mergers
One of Ian Silk’s favourite quotes about the 2006 merger between STA and ARF is that “the planets were in alignment”. Perhaps a minor astrological miracle is what it takes for a super fund merger to get up these days, because nothing remotely comparable to the $20 billion get-together that created AustralianSuper has happened since. (SERF and SRF formed Maritime Super at $3.5 billion; Victoria’s Catholic Super plus National Catholic Super will equal about $3.5 billion too; JUST and Print formed Media Super at $2 billion – if I’ve missed a bigger one, send letters to the usual address.)
More than tax breaks needed for big mergers
One of Ian Silk’s favourite quotes about the 2006 merger between STA and ARF is that “the planets were in alignment”. Perhaps a minor astrological miracle is what it takes for a super fund merger to get up these days, because nothing remotely comparable to the $20 billion get-together that created AustralianSuper has happened since. (SERF and SRF formed Maritime Super at $3.5 billion; Victoria’s Catholic Super plus National Catholic Super will equal about $3.5 billion too; JUST and Print formed Media Super at $2 billion – if I’ve missed a bigger one, send letters to the usual address.)
Signs of life in hedge funds of funds
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While the hedge funds of funds (FoF) part of the funds management industry has been particularly damaged by, firstly, the liquidity crisis and, secondly, the stalling of new investments, there are signs of a tentative recovery emerging. Liongate Capital Management, a US$2.2 billion London-based hedge FoF business, reports that in both Europe and the US RFPs from institutional investors are starting to flow.
Signs of life in hedge funds of funds
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While the hedge funds of funds (FoF) part of the funds management industry has been particularly damaged by, firstly, the liquidity crisis and, secondly, the stalling of new investments, there are signs of a tentative recovery emerging. Liongate Capital Management, a US$2.2 billion London-based hedge FoF business, reports that in both Europe and the US RFPs from institutional investors are starting to flow.
Sherry drives another nail in the >9 per cent coffin
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The government has quashed hopes of a boost to the 9 per cent superannuation guarantee, with Minister for Superannuation Nick Sherry ruling out any change to the contribution. Speaking at a post-Budget breakfast held by the Australian Institute of Superannuation Trustees (AIST), Sherry said: “I do not believe employers should be paying any more, full stop, unless they want to make additional payments voluntarily. “The 9 per cent superannuation guarantee I don’t think in any way, shape or form is going to change in any significant way.”
Sherry drives another nail in the >9 per cent coffin
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The government has quashed hopes of a boost to the 9 per cent superannuation guarantee, with Minister for Superannuation Nick Sherry ruling out any change to the contribution. Speaking at a post-Budget breakfast held by the Australian Institute of Superannuation Trustees (AIST), Sherry said: “I do not believe employers should be paying any more, full stop, unless they want to make additional payments voluntarily. “The 9 per cent superannuation guarantee I don’t think in any way, shape or form is going to change in any significant way.”
Sherry drives another nail in the >9 per cent coffin
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The government has quashed hopes of a boost to the 9 per cent superannuation guarantee, with Minister for Superannuation Nick Sherry ruling out any change to the contribution. Speaking at a post-Budget breakfast held by the Australian Institute of Superannuation Trustees (AIST), Sherry said: “I do not believe employers should be paying any more, full stop, unless they want to make additional payments voluntarily. “The 9 per cent superannuation guarantee I don’t think in any way, shape or form is going to change in any significant way.”
