Tim Gardener was disgruntled. “I worry about the corporate bond space. If you invest according to market capitalisation in the corporate bond space, you invest the maximum amount of your allocated money in the most indebted companies, all else being equal,” Gardener said in an interview at AXA Investment Managers’ London office on May 25. “Lending more of your money to someone with a huge amount of debt, rather than some who has got less, doesn’t strike me as a winning strategy.” Gardener worked for more than 23 years in the UK at [...]

Mergers can benefit superannuation funds: favourable mandate structures, terms and fees can be secured; co-investments or direct investments in unlisted assets can be made; more money to allocate becomes available in a capital-constrained world; and capital-gains-tax credits can be used to offset future profits from domestic stocks. What can go wrong? Funds don’t agree on how their merger can strengthen their investment strategy or they don’t lay thorough plans to combine portfolios. The cost of failure is daunting. About 1 per cent of net returns can be lost if a [...]

Basis points matter, according to Andrew Spence, chief investment officer of the $6-billion Qantas Superannuation Plan, because the volumes of money in superannuation are “enormous.” He is not talking about incremental investment gains on billions of dollars of invested capital. He’s speaking about saving money. Specifically, the $1.42 million that the fund saved in the year to June 30, 2012 by taking control of foreign exchange transactions made for its $2.5 billion in global equity and alternative asset holdings. It’s the first of many net savings that Spence believes can [...]

Incoming laws preventing tax losses in superannuation mergers will spur more funds to unite as they face greater compliance workloads, according to an industry peak body. The draft legislation, aiming to allow merging super funds to offset investment losses against future capital gains tax (CGT), will trigger the latent plans of many funds to join forces as they seek to provide better services and cope with the administrative burden of running mandatory default funds from mid-2013, according to the Australian Institute of Superannuation Trustees (AIST). “A lot of member funds [...]

Staff at the $4.6-billion Equipsuper could start making tactical investment bets through futures contracts by the end of the year. Equipsuper’s seven-person investment team aims to begin making investments in all asset classes by using futures based on major stock and bond market indexes by December. The contracts would enable the fund to place trades without incurring the transactional and tax costs of shifting assets among outsourced investment managers. “It gives us flexibility to move money more quickly,” Danielle Press, chief executive of the Melbourne-based industry fund, said in a [...]

Qantas Superannuation Plan has begun using a RiskMetrics system to gauge how its $6 billion in assets can withstand various investment risks. The fund, which manages the retirement savings of more than 33,000 Qantas Group employees, started using the RiskMetrics product, called RiskManager, in late June to better track how changes in investment markets affect its investments. “We’ve implemented a whole-of-fund risk platform,” Andrew Spence, chief investment officer of the Mascot, Sydney-based fund, said in an interview on Friday July 20. “Ninety per cent of what it shows will be [...]

Managing conflicts of interest, setting rules for investment executives and thinking about what people want are part of Dick Morath’s fiduciary duty. Morath, a former chief executive of MLC’s retail and corporate fund businesses, influences how billions of dollars of Australians’ money is invested. He is a trustee of MLC Nominees, the board governing two MLC superannuation businesses, and PFS Nominees, which oversees Plum Financial Services, a master trust managing about $14 billion in corporate superannuation benefits. He is also chair of the administration business behind Plum and oversees MLC’s [...]

Equipsuper wants to strengthen its financial planning unit under a newly appointed boss, Justin Sadler, a former AIA Financial Services executive. Sadler, who started work at the $4.6-billion industry fund on July 9, will oversee the advice delivered by its financial planners and the expansion of the team beyond five people. He led about 80 AIA financial advisors until the company shut the division in February 2011. Equipsuper is keen to forge closer relationships with members, particularly the 40 per cent that are between 30 and 45 years old. Australian [...]

LUCRF Super, the $3.1-billion superannuation fund, has hired ex-FuturePlus investment analyst Daniel Grioli to help it adapt to volatile markets. Grioli, who joined LUCRF’s nine-person investment team as a senior analyst in late June, will help the fund develop an investment strategy that is more responsive to changes in financial markets. He reports to head of investment strategy, Ben Samild. “The post-financial crisis environment is a difficult one,” Greg Sword, chief executive officer of LUCRF, said in a telephone interview from the fund’s head office in Melbourne’s Docklands on Thursday [...]

Geoff Mellor, chief executive of the £20-billion UK fund Coal Pension Trustees (CPT), used his opening words to ask why the audience of Australian superannuation bosses were still in the room. “Do you feel that travelling half-way around the world, sitting in a conference venue and listening to serial speakers is a better use of your time than actually getting out and about into the UK market?” he asked delegates of Global Dialogue 2012. The conference was organised by the Australian Institute of Superannuation Trustees, the peak national body for industry superannuation and held at [...]