Like most investors around the globe, Australian superannuation funds are experiencing tough times. There’s no escaping the fact that funds have been hard hit by the global financial crisis and retirees – as well as those approaching retirement – are suffering. The combined effect of the market meltdown and historically low interest rates means retirement for more older Australians is a far cry from the worryfree lifestyle that so many of us envisage for our post-working life. In this sort of climate, it’s inevitable that questions are raised as to whether our compulsory super system – long viewed as a trailblazer for other nations around the world – is everything it is cracked up to be.
One bad year no reason to give up on super
Like most investors around the globe, Australian superannuation funds are experiencing tough times. There’s no escaping the fact that funds have been hard hit by the global financial crisis and retirees – as well as those approaching retirement – are suffering. The combined effect of the market meltdown and historically low interest rates means retirement for more older Australians is a far cry from the worryfree lifestyle that so many of us envisage for our post-working life. In this sort of climate, it’s inevitable that questions are raised as to whether our compulsory super system – long viewed as a trailblazer for other nations around the world – is everything it is cracked up to be.
Why start a career in superannuation?
A spate of recent high profile personnel moves from investment banking and investment management into superannuation prompted some of the FEAL executives to explore the reasons why their employees are attracted to a career in super. A high profile fund CEO who recently changed careers from investment management (he can’t be named because the FEAL Forum was conducted on ‘Chatham House’ rules) conducted a straw poll of his investment team on why they worked in super, and the overwhelming response was that it was “closer to the problem”.
Why start a career in superannuation?
A spate of recent high profile personnel moves from investment banking and investment management into superannuation prompted some of the FEAL executives to explore the reasons why their employees are attracted to a career in super. A high profile fund CEO who recently changed careers from investment management (he can’t be named because the FEAL Forum was conducted on ‘Chatham House’ rules) conducted a straw poll of his investment team on why they worked in super, and the overwhelming response was that it was “closer to the problem”.
Opportunities abound for the stable and the strong
For institutional investors, superannuation funds and fund-of-funds managers alike, it takes a lot of courage and trust to have lived through the 2008 dislocation and still have to allocate money. The key, according to Chicagobased Roxanne Martino, president and chief executive of Harris Alternatives which has $US10.1 billion in funds under management,12 per cent of which is from Australian investors, is to look at each funds manager individually and assess whether they stayed true to their strategy.
Opportunities abound for the stable and the strong
For institutional investors, superannuation funds and fund-of-funds managers alike, it takes a lot of courage and trust to have lived through the 2008 dislocation and still have to allocate money. The key, according to Chicagobased Roxanne Martino, president and chief executive of Harris Alternatives which has $US10.1 billion in funds under management,12 per cent of which is from Australian investors, is to look at each funds manager individually and assess whether they stayed true to their strategy.
Tail wags the dog – modelling tail risk in alternatives
When it comes to modelling the potential risks and returns of alternatives, trustees continue to rely on mean-variance approaches (such as expected average returns and annual return volatility), but acknowledge it is not the best solution as correlations are non-stationary (that is, can vary over time), and illiquidity and leverage create tail risk. In … Read more
Tail wags the dog – modelling tail risk in alternatives
When it comes to modelling the potential risks and returns of alternatives, trustees continue to rely on mean-variance approaches (such as expected average returns and annual return volatility), but acknowledge it is not the best solution as correlations are non-stationary (that is, can vary over time), and illiquidity and leverage create tail risk. In … Read more
The time is right for managed volatility strategies
There are not many strategies that have gone unscathed by the global financial crisis, indeed few people, places or things have gone unchallenged by this crisis and its effects. But one strategy that pre-dates the global financial crisis has proved its robustness by surviving, so far. Minimum variance (or managed volatility) strategies target volatility … Read more
The time is right for managed volatility strategies
There are not many strategies that have gone unscathed by the global financial crisis, indeed few people, places or things have gone unchallenged by this crisis and its effects. But one strategy that pre-dates the global financial crisis has proved its robustness by surviving, so far. Minimum variance (or managed volatility) strategies target volatility … Read more
Fundie IT budgets slashed, but not burned
Investit, a specialist administrative consultant to funds managers, has completed a survey on the IT budgets of 29global firms with $3.25 trillion under management and a combined IT spend in 2008 of $1.53 billion, and found that the smartest firms are doing more with the same or less. The head of Investit’s Australian office, Doug Neill, said the consultancy’s latest ‘IT Value Survey’ was conducted in late 2008 and focussed on the effects of the financial crisis. “Inevitably, as markets have contracted, budgets have come under pressure. However for IT, that’s not the full story,” Neill says.
Fundie IT budgets slashed, but not burned
Investit, a specialist administrative consultant to funds managers, has completed a survey on the IT budgets of 29global firms with $3.25 trillion under management and a combined IT spend in 2008 of $1.53 billion, and found that the smartest firms are doing more with the same or less. The head of Investit’s Australian office, Doug Neill, said the consultancy’s latest ‘IT Value Survey’ was conducted in late 2008 and focussed on the effects of the financial crisis. “Inevitably, as markets have contracted, budgets have come under pressure. However for IT, that’s not the full story,” Neill says.
