Some members are excited for retirement, while others approach it with a “real sense of shame and fear”. Funds are going to have to figure out how to cater to both groups or risk failing them all.
If there’s one lesson for investors from the past five years, it’s that chopping and changing their strategy – even in the face of massive market turmoil – doesn’t always pay.
AustralianSuper fills ‘pivotal’ chief liquidity officer position
AustralianSuper has appointed Chanu Bhindi as its first chief liquidity officer (CLO) as more of its members approach retirement with higher balances and liquidity management becomes a “key focus for the fund’s operations”.
Bhindi joins the fund from Commonwealth Bank, where he was general manager for capital management and stress testing and had responsibility for the group’s funding and liquidity.
“Chandu brings an enormous amount of experience to the fund and is yet another example of how our scale and growth trajectory is attracting the best talent available in financial services,” said AustralianSuper CIO Mark Delaney.
“Chandu will play a pivotal role in making sure the fund is ahead of the curve when it comes to managing liquidity and risk across the whole range of assets that members own. The appointment is a clear reflection of the importance that we place on liquidity management and the major role it plays in the fund’s operations and the broader Australian economy.”
AustralianSuper began its search for a CLO back in December 2022, announcing at the same time that head of capital markets Joris Hillmann would serve in the role in an acting capacity. Liquidity management has become more important to super funds in recent years given the unexpected early release demands made of them during the Covid period and as illiquid assets have come to make up a larger and larger chunk of their portfolios.
In early 2023, PGIM wrote that modelling expected and unexpected liquidity demands across entire funds might go beyond the abilities of the chief risk officer function and advocated for the creation of CLO roles to fill the gap. PGIM noted that liquidity demands can suddenly cascade, as they did in 2020 when funds might have received capital calls at the same time they were likely to be receiving reduced inflows, having to maintain higher amounts of cash to meet FX hedging variation margin calls, and dealing with members switching into lower risk options.
“It’s an exciting time to join AustralianSuper as the fund continues to grow so that it can deliver on its purpose of helping members achieve their best financial position in retirement,” Bhindi said. “I’m looking forward to implementing liquidity management strategies and developing capabilities that will drive efficient management of liquidity and provide the fund with optionality as it continues to broaden its offshore footprint.”
