Managers missing US fund opportunities

Institutional managers are overlooking opportunities offered by US pension funds due to local biases and lack of innovation in the investment sector, according to IFM Investors chief executive Brett Himbury.

Himbury said that the size of US pensions funds dwarfed that of local institutionally managed funds and offered new markets for managers — but he was "staggered by how little US pensions funds are accessed by local managers".

Himbury stated that IFM Investors was involved with four US pension funds offering infrastructure investments, but this position was unusual within the local market.

"There is a local and growing superannuation pie and the dynamics of that market are very attractive at keeping managers from looking at overseas markets," Himbury said.

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"However local managers also tend to be more traditional and overseas clients are not looking for vanilla-style investments right now.

"There has also been a focus on implementation and execution in recent years due to increased levels of regulation, with the end result being that there has not been much focus on innovation."

Himbury said that despite some public scrapping between retail and industry super funds, institutional managers were not looking for a fight with the retail market.

"Institutional managers continue to give pace and discipline and look at long-term investments. Of course short term is important as well, because lots of short terms equal the long term, but we are not abusing the luxury of the time we have to invest," Himbury said.