The executive chair of Industry Fund Services, Garry Weaven, is actively discussing new investment strategies in the wake of the successful bedding down of the integration of Industry Fund Services and AusFund into IFS to form Industry Funds Management.
And one of the priorities according to Weaven has to be the development of a strategy with respect to the active management of Australian equities along with further investigation of opportunities with respect to international infrastructure.
If anyone doubts the ability of IFM to pursue the Weaven agenda, it is worth noting that as a result of the recent integration and a range of other changes, the organisation has grown its staff numbers from a mere half-dozen to 23.
The bedding down process began in March soon after the integration strategy was announced with Weaven saying at the time that the new entity would, in 2006, itself be integrated into the industry superannuation funds bank — Members Equity — to create “a single, unified institution of considerable substance”.
In the interim, however, IFM represents the vehicle with which Weaven has to work, based on the fact that IFS is now 100 per cent owned by nine superannuation funds and, in turn, is the 100 per cent owner of IFM and the IFS private group, Development Australia Fund Management.
The documentation provided by Weaven also makes clear that IFS is also the trustee of the trust which owns Members Equity on behalf of 43 superannuation funds, with Members Equity holding a call option over 100 per cent of IFS’s equity, exercisable between January and June 2006 at market value.
In other words, the foundations for Weaven’s “single, unified institution of considerable substance” have already been laid and in the meantime, IFM boasts funds under management in excess of $5.3 billion.
Weaven and IFM general manager Damian Moloney make no bones about the fact that they still face some considerable challenges, but they believe that by and large, they have the confidence of their major shareholders.
IFM’s vision statement is to: “become the investment manager of choice in our not-for-profit superannuation fund network”.
It says that its core values with respect to its investments continue to be:
n innovation;
n simplicity;
n disciplined strategies;
n cost effectiveness; and
n demonstrated value add.
“IFM will continue to apply these core values to the investment management market place through leveraging our competitive advantage in areas where the market does not deliver best practice solutions,” it says.
According to Weaven, this final point will tend to underscore the group’s strategy as it moves forward and looks to concentrate on things that the other players either are not doing, are not doing properly or are charging too much for.
However, the immediate agenda spelled out in the IFM briefing document is to “build on the existing private markets franchise” via:
n DAF Global II;
n new commitments to DAF Infrastructure and DAF Social Infrastructure;
n Private equity advisory services to larger investors;
n Development Australia Fund IV (2006); and
n New commitments to Alternative Fixed Income Fund.
On top of this, the agenda says IFM will aim to “grow existing enhanced indexed business via new mandates” and, potentially, a post-tax investment vehicle.
Weaven becomes visibly more animated when he looks at investment possibilities over the horizon such as green energy, international infrastructure, private debt and niche active domestic listed equities.
He says that international infrastructure is something that needs to be examined because the deal flow is not fast enough in Australia.
On green energy, Weaven points out that IFM already has the runs on the board via its long-standing interest in Pacific Hydro and has come to understand the fundamentals of wind power and alternative energy.
On infrastructure, Weaven believes that ultimately the major superannuation funds will represent major players in the provision of both soft and hard infrastructure in Australia.
