POWERED BY MOMENTUM MEDIA
Cost and complexity lead to hybrid investment models
Superannuation funds will retain hybrid internal/external investment teams due to cost pressures and international allocations, fund executives said at the Citi Australian Investment Conference and Asian G10 Rates Conference.
VFMC head of strategy Peter Osborne said his company outsourced its global investment capability but had achieved cost savings by building its internal investment team (which made domestic decisions) to 35 employees over a number of years.
UniSuper chief investment officer John Pearce said UniSuper would not stop looking to external managers for emerging markets, global small caps and global credit.
He said the UniSuper budget could not be stretched to accommodate an internal investment manager with the right skill set. The fund had bolstered its domestic capabilities in large cap equities, cash, fixed interest and property, Pearce said.
UniSuper's internal investment team also aligned the liabilities of large stock positions, with the 40 per cent of the fund's member base in its defined benefit scheme, more efficiently than external managers could, according to Pearce.
Alison Tarditi, chief investment officer for Commonwealth Super, said Commonwealth Super could not invest money directly. The degree to which a fund internalised expertise was dependent on ability and cost, she said.
Sovereign wealth funds from China and Singapore said they also outsourced various investment functions.
Chun Hong Chan, managing director of GIC, questioned why an institution would not outsource to an external manager that could deliver a better result, even if it had its own internal capabilities.
Osborne said an internal investment team should not be under-valued for the strong investment culture it could bring.
AUTHOR
Staff Writer
Money Management staff writers are writers who contribute to the website from time to time. If you would like to discuss the content contained within this article please contact us.
Recommended for you
The lower outlook for inflation has set the stage for another two rate cuts over the first half of 2026, according to Westpac.
With private asset valuations emerging as a key concern for both regulators and the broader market, Apollo Global Management has called on the corporate regulator to issue clear principles on valuation practices, including guidance on the disclosures it expects from market participants.
Institutional asset owners are largely rethinking their exposure to the US, with private markets increasingly being viewed as a strategic investment allocation, new research has shown.
Australia’s corporate regulator has been told it must quickly modernise its oversight of private markets, after being caught off guard by the complexity, size, and opacity of the asset class now dominating institutional portfolios.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
DomaCom DFS Mortgage
92.15 3 y p.a(%)
2
Global X 21Shares Bitcoin ETF
53.24 3 y p.a(%)
3
Global X GlobalX FANG+ ETF
43.15 3 y p.a(%)
4
DomaCom Shoreline North Coogee
36.26 3 y p.a(%)
5
GAM LSA Private Shares AU I
35.87 3 y p.a(%)
