AustralianSuper

Pension funds are increasingly turning to active management to generate returns in a hostile environment. But as they seek to become true global investors, super funds face a different set of tradeoffs.

The CEO of AustralianSuper says the Morrison Government doesn’t get enough credit for introducing the YFYS reforms, and that funds need to stop arguing over its detail and get on with the business of performing against the benchmarks.

As consolidation gathers pace and big super funds move their investments offshore, it will likely be the biggest private markets managers that benefit. But Your Future Your Super presents a unique set of challenges that can’t be easily overcome.

As homegrown competition intensifies and offshore players eye Australia’s retirement savings, the industry funds are now “frenemies”. Reinvigorating the collaborative model will be the key to their survival.

Industry superannuation has, for the most part, been a roaring success. But it needs to retain its “missionary zeal” if it’s to avoid the same fate that befell the other giants that once dominated the landscape.

The Albanese Government has begun to explore the potential negative impacts of super fund consolidation. The question is whether a super fund can ever be too big to fail.

Hostplus CIO Sam Sicilia believes the trillions of dollars washing around super could be put to good use in nation-building projects – and that criticisms of investing in unlisted assets are an “absurdity”.

Overseas, Australia’s biggest super fund is a small fish in a massive pond. To achieve the scale it wants it will have to dive deeper into the private markets, meeting stiff competition from its North American peers along the way.

Not-for-profit (NFP) investors are keen to jump into the private markets, but are being held back by the complexities of manager selection and concerns around cost.

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.