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Despite authorities taking their foot off the environmental, social and governance pedal and recent volatility in equities and bonds, the benefits of Artificial Intelligence and improved investor transparency are just beginning.
Australian Retirement Trust joins the jet set
Australian Retirement Trust (ART) has opened its first offshore office in London in an expansion that aligns with its strategy to “further build out a leading global investment capability”.
But while other funds are shifting some of their internal investment capabilities into their offshore offices, ART’s team will continue to work with external managers to source new opportunities, a model that CIO Ian Patrick discussed last year alongside the possibility of the fund opening an offshore office.
“When you’re running a hybrid model where implementation is largely and dominantly affected through third parties or alongside partners, I don’t think you have quite the same need for a global footprint,” Patrick told the Association of Superannuation Funds of Australia conference in November.
“If you’re originating transactions and you need to be active with networks in those offshore capital markets, you likely do need an office staffed by a meaningful number of people. Will we have more than a Brisbane and Sydney presence in the not too distant future? Quite likely. Will that be to, under our model, build teams to originate transactions? No it will not; it will be to supplement the advice back to the domestic business in Australia to allow it to be the most effective it can be in terms if access to time zones and the like.”
With APRA-regulated superannuation assets now almost equal to the total market cap of the ASX, funds are increasingly constrained by their size in the local market and both AustralianSuper and Aware Super have opened offshore offices to ease international capital deployment. More than 40 per cent of ART’s assets sit outside in Australia and it has A$25 billion invested across the UK and Europe.
“Australian Retirement Trust partners with world-class external managers and this is the next logical step for us to expand our investment capability,” Patrick said. “Having an office in close proximity to our external investment managers will help us secure even more compelling investment opportunities for our members.”
But ART’s move is also a sign of the growing gap between the megafunds and their (relatively) smaller peers, with the likes of the $85 billion Cbus and the $125 billion UniSuper so far eschewing international offices due to cost, operational risk and the difficulties of hiring top managers overseas.
