Institutional investors need advanced monitoring and investment tools to keep up with the expected increase in reporting requirements, BNP Paribas Securities Services believes.
The Federal Government's move to increase independent directors on super fund boards will place more emphasis on reporting and data analytics, the global custodian said.
BNP Paribas Securities Services head of product management, Justin Burman, said "We have noticed that an increase in new board members tends to result in an increase in reporting for senior management and those boards".
"There is also greater pressure on funds to move away from the traditional siloed view of risk to a more holistic understanding," he said.
Burman noted sophisticated technical tools to model and calculate scenarios were also needed to understand the impact to the fund's value under different scenarios.
"But the tools themselves are not enough. It is imperative to have access to data that is both comprehensive in coverage and granular in detail to be able to allow flexible scenario modelling," he said.
"Institutional investors will require advanced monitoring and investment tools and techniques to confidently handle the ever-growing variety of risks and increase efficiency and effectiveness."
While not having a strategic asset allocation might be ‘uncomfortable’ for some investors, the Future Fund believes its unique investment approach helps the fund capture long-term value ahead of the curve.
The sovereign wealth fund grew $11.5 billion in the March quarter, according to its latest portfolio update, having previously voiced caution about inflation’s downward trajectory.
The property group, owned by industry super fund Aware Super, has announced two new projects with a total construction value of $320 million that will add more than 700 homes to Melbourne’s rental market.
While institutional investors, including super funds, unanimously acknowledge the energy transition as a significant challenge, their perspectives on the extent of their involvement in addressing the substantial capital requirements vary widely.
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