The country\u2019s largest super fund, AustralianSuper, is planning to rapidly expand its in-house investment team, urging staff to recruit former colleagues as the industry funds struggle to offer competitive wages.<\/p>\n
AustralianSuper\u2019s chief investment officer Mark Delaney announced plans to increase its investment team from 200 to 300 in the next three years, as the fund presses ahead with its strategy to cut costs by dumping external managers.<\/p>\n
Industry super funds have historically offered lower wages than bank-owned super funds, making it more difficult to attract and retain talent from the highly remunerated funds management sector.<\/p>\n
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AustralianSuper chief investment officer said the fund\u2019s performance was \u201cgood without being fantastic\u201d.<\/span>Credit:<\/span>Janie Barrett<\/cite><\/p>\n In a leaked recording of an all-staff webinar, obtained by The Age <\/i>and Sydney Morning Herald<\/i>, Mr Delaney called on staff to \u201cdig out\u201d personal networks for employee referrals.<\/p>\n \u201cWe\u2019re going to be expanding the department quite materially over the next three years, by at least 50 per cent,\u201d Mr Delaney said. \u201cWe\u2019ve got such big capabilities to build out, there\u2019s going to be heaps of opportunities.<\/p>\n \u201cSo use your networks, you\u2019ll know people you\u2019ve come across who you\u2019ve worked with who are really talented who may just want to come to work with AustralianSuper. And be proactive about it.\u201d<\/p>\n Over the course of last financial year, the fund dropped four external mandates and boosted its internal funds under management by $11 billion to $87 billion, nearly half the total assets, according to annual reports.<\/p>\n The recruitment drive has caused tensions within AustralianSuper over how staff are remunerated, with some sections of the investment team awarded bonuses while others are not.<\/p>\n One staff member, who could not be named because they are not authorised to speak to the media, said bonuses were only awarded to staff whose performance could be measured by financial returns, but often this required less work. \u201cIf you look at some of the front office people, they don\u2019t necessarily need to be performing, they just need to be doing their job,\u201d the staff member said.<\/p>\n \u201cA lot of the investments they do, there\u2019s an investment committee, so it\u2019s not like any one person is on the hook for their performance.\u201d<\/p>\n AustralianSuper declined to comment.<\/p>\n Mr Delaney said the fund had been a top performer over five to 10-year measures, but its ranking had slipped to fifth and sixth place in one-year measures.<\/p>\n \u201cWhen we look at performance, it continues to be pretty good without being fantastic,\u201d he said.<\/p>\n The fund\u2019s portfolios had been well positioned during last year\u2019s economic turmoil, Mr Delaney said, adding future growth would be driven by expanding its investments in private markets \u2013 infrastructure and property.<\/p>\n \u201cThe only thing we say is in hindsight, we should have put more bets on the table. We should have put bigger bet on the recovery in the second half of last year,\u201d he said.<\/p>\n AustralianSuper\u2019s investment committee had seen \u201cconsiderable change\u201d over the past 18 months as three key directors had been replaced and Mr Delaney said this would create challenges in the short term.<\/p>\n \u201cThe key thing is, when you have three people moving off and three moving on, the institutional knowledge as to how we do things is nowhere near as strong,\u201d he said.<\/p>\n Longstanding director and chief executive of Australian Industry Group Innes Willox left the company after nine years.<\/p>\n Mr Delaney said Mr Willox left amicably. \u201cWhen he started, the equities team had about four people. It was all external managers,\u201d Mr Delaney said. \u201cHe completely transformed how we did equities.\u201d<\/p>\n A concise wrap of the day on the markets, breaking business news and expert opinion delivered to your inbox each afternoon. Sign up\u00a0here.<\/p>\nMarket Recap<\/h3>\n
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