Until now, Japanese funds have largely been bond and cash investors. As they expand into real assets, Frontier wants to own that consulting niche.
Super funds are increasingly adding thematic passive products to their self-directed investment options as they face new competition from Gen Z focused start-ups – but the ultimate theme is still on the outs.
Australia’s super funds have been leaders in adopting private markets investing, but they’ve still got a long way to go. Overcoming the obsession with liquidity will be one hurdle, says the boss of $900 billion private markets manager Hamilton Lane.
Australian Retirement Trust (ART) and QIC are continuing the trend of big funds investing in affordable housing, working in conjunction with community housing provider Brisbane Housing Company.
A big chunk of super funds are now in “limp mode” as their buffer against the performance test evaporates. And sustainable investing is getting harder when even tobacco exclusions eat up the tracking error budget.
“These financial cleansings are really important to how you set up asset markets; they’re really important for how the Fed regains credibility; and they’re very important for curbing excessive risk-taking.”
Performance concerns for sustainable investing have risen to the fore as the Your Future Your Super (YFYS) test shortens investment horizons. The wider return outlook is more challenged too.
“In general, it is a healthy environment for hedge funds, with allocation from institutional investors expected to rise. As markets brace for uncertainty, investors expect hedge funds to offer positive returns while reducing portfolio risk.”
The hunger for sustainable investing continues apace with Perennial winning a $100 million mandate from Mercer Investments for its Better Future small- and mid-cap strategy.
Super fund members have been “spared the worst”, while the outperformance of the top ten funds was generated by active management and chunky allocations to private markets.
