The $32 billion industry superannuation fund AustralianSuper has cut its investment fees by almost 20 basis points as it continues to focus on costs.
AustralianSuper announced at its annual general meeting last week that it reduced its fees from 0.84 basis points in 2008/09 to 0.65 basis points in 2009/10.
"We have managed to reduce our investment fees as a result of a number of activities undertaken by the fund," AustralianSuper senior manager of investments Peter Curtis said.
The merger of the Superannuation Trust of Australia and the Australian Retirement Fund in 2006 to create AustralianSuper initially enabled the merged fund to renegotiate fees with existing and new investment managers.
Since the merger, AustralianSuper has implemented further initiatives to reduce investment fees.
In 2009, the fund halved its Australian equities managers, moving part of the equities portfolio into passive management.
It has also placed a greater emphasis on its internal investment team.
"We have gradually moved to using more of our internal capabilities instead of relying on external advisers," Curtis said.
The fund had used a number of specialist external advisers to provide advice on asset classes such as international property and infrastructure.
It now has 24 investment professionals who each have specialist knowledge across a range of asset classes.
"We have also removed expensive investment strategies such as fund-of-fund hedge funds," Curtis said.
AustralianSuper will continue to take advantage of its size to secure better pricing for its investments.
"We have started to get better outcomes because of our size. Opportunities for direct investment are growing," Curtis said.
"For example, we invested directly in Victoria's desalination plant. This allowed us to reduce our asset fees. Costs remain a critical area for the fund and is something we will continue to focus on."
