State Super, Frontier launch partnership with new ICIO model

State Super has begun its partnership with Frontier Advisors, transferring investment staff and taking a major equity stake to support long-term capability.

State Super has launched its new strategic partnership with Frontier Advisors, transferring 15 investment and operations specialists to the advisory firm and becoming a significant shareholder in an industry-first arrangement.

The acquisition had first been announced in early October and has now taken effect.

Announcing the move, State Super chief executive John Livanas said the transition marked the start of a new model for the fund, which has more than 80,000 members and $38 billion in assets.

The transferred team, led by chief investment officer Charles Wu, will continue to support State Super through Frontier while helping establish a new independent chief investment officer (ICIO) model within Frontier’s service offering.

As part of the agreement, State Super will become a 23.66 per cent shareholder in Frontier, joining existing investors AustralianSuper, Hesta, Cbus and First Super.

“We are extremely proud to become a significant shareholder in Frontier Advisors alongside some of the giants of superannuation in Australia and we look forward to seeing Frontier thrive as it grows into new areas,” Livanas said.

According to the fund, it has worked with Frontier for 20 years and has been in discussions about the partnership for some time.

Livanas said the arrangement is designed to address the natural challenges facing the fund as its membership ages and funds under management decline, while ensuring investment capability remains stable.

The collaboration will allow members to retain access to the same technical expertise that has managed their funds to date.

“It’s gratifying to see the new model become a reality,” Livanas said. “We have now got the team for today and tomorrow, and there is a growth vector for that team at Frontier, which gives them a great opportunity.”

The former State Super team’s arrival will immediately expand Frontier’s investment services and underpin the rollout of its new ICIO model.

Frontier said the model will not only continue supporting State Super but also provide other clients with a differentiated capability.

Frontier Advisors chief executive Andrew Polson said the firm is “tremendously excited to welcome Charles and his team into Frontier”.

He added that Frontier’s approach will remain focused on unconflicted advice.

“Our unconflicted advice model is well known in the market and that won’t change.

“But Frontier can now provide investors with institutional grade end-to-end investment services that let them retain control over their own investment policy, strategy and portfolio construction without needing to compromise on the ability to choose their own investment products in the process.”