AustralianSuper deputy chief executive and chief investment officer Mark Delaney said the company’s internal management plans are supported by risk controls and a robust operational system, which are both scalable.
The first phase of its internal investment project also included increasing the infrastructure team and developing direct management capability. Australian super was a major direct investor in the Industry Funds Management-led consortium that successfully bid for the $5.1 billion NSW Ports (Port Botany and Port Kembla) tender in April this year.
The company also increased its property team and established a direct investment mandate with Australian unlisted property fund manager ISPT for the Australian market and with global property investor, Hendersons, for the UK market.
AustralianSuper has also developed an Australian equities portfolio management team, a trading and execution team and has now commenced trading.
Mr Delany said there were a number of key advantages to this project, including a cost reduction of up to 15 basis points. Mr Delany said the amount of savings will increase as the fund grows.
“[A saving of] 15 basis points on a $100 billion portfolio is a $150 million back into members’ retirement savings,” he said.
According to Mr Delany, the company saved money on the NSW Ports investment by going direct and the equities team developed its portfolio for a third of the cost of other transactions previously completed.
AustralianSuper hired 23 new staff members throughout the first phase of the project, including investment managers, trading staff, analysts and operational specialists, including risk and compliance.
“There has been a huge amount of work to ensure we have the right people, systems, technology, policies and processes to ensure the success of this project,” said Mr Delany.
“It has touched almost every part of the fund’s operations - not just the investment team - and I am very pleased to say it has gone to plan and been delivered on time and on budget,” he said.
Mr Delany said the fund has been able to attract a high calibre of investment professionals across the range of asset classes to lead internal investment management.
“Internal investing is an excellent opportunity for us to further harness our size to extract greater value from the portfolio,” he said.
Phase two of the project, which will look at global equities and direct credit and loans, has already commenced.
