Australia’s Largest Super to Grow Internal Team by a Third

 Using external managers is falling increasingly out of fashion Down Under.

The internal investment team of AustralianSuper is to be boosted by at least 30% as the CIO looks to cut external management costs.

Mark Delaney, CIO of the country’s largest superannuation fund, told Bloomberg that he was looking to grow the current 100-strong team to at least 130.

Last month, the fund released a statement on its internal investment team saying it had “a scalable platform in place to increase its equity portfolio management capabilities over time”.

“Having successfully implemented the first stage of our internal management strategy, we’re ready to scale up our activities and add new capabilities,” the statement said. “AustralianSuper is extending its in-house capabilities to cover small-capitalisation Australian equities, global equities, direct loans, and credit instruments. Part of this process involves expanding the platform and processes to enable the fund to invest in around 50 international markets.”

Delaney told Bloomberg that global equities would be the next team to be expanded, with front and back office staff joining the team.

The superannuation fund, which invests around A$78 billion ($69 billion) on behalf of its members, is amongst a number bringing asset management in-house.

Last year, a report by State Street said the choice for superannuation schemes to decide between keeping external capabilities or bringing the resources in-house was one of the industry’s greatest challenges.

AustralianSuper concluded its statement in August by saying: “Internal management has been great for members as it means we’ve been able to maintain performance while delivering considerable cost savings, which is great for their bottom line.”

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