Industry super fund Aware Super, one of Australia’s biggest pension funds, is planning to “more than double” its investment team and increase the proportion of its internally managed portfolio.
The fund currently has more than 70 people on its investment team, according to an Aware spokesperson, which indicates that at least 70 investment specialists will be hired.
Aware Super plans to make these hires across all asset classes over the next few years, the spokesperson told AsianInvestor, without specifying the time period or in which locations they will be based.
On top of these investment team hires, the fund will also be adding supporting team members.
“Naturally we expect to increase the number of team members in various support areas (e.g. legal, tax, governance and operations) to help with this growth. The exact locations for our offshore footprint are still under consideration,” the spokesperson said.
The A$150 billion ($110 billion) fund, which was formed last year in a multi-fund merger, manages 20% of its portfolio internally but this will soon rise.
“We’re planning to build this out to about 40%-50% over the next four to five years. These numbers – both the current levels and targets – vary across asset classes,” the spokesperson said.
INTERNAL RESOURCES EXPANSION
Aware Super has been focused on expanding internal capabilities and making changes to ensure good returns at low costs over the past five years, chief investment officer Damian Graham said in a statement last week (July 21).
“We will need to continue to adapt and change our approach as we grow to be a A$250 billion-plus fund in the future,” he said. “This will mean continuing to develop our internal capability and building out our team both in Australia and globally. We will also look to expand our portfolio within Australia and internationally.”
Aware is not the only Australian asset owner looking to expand its internal capabilities. Sovereign wealth fund Future Fund reportedly had plans to add 70 to its current investment team of 80 to help manage mandates for its private assets, while AustralianSuper was revealed to be hiring 52 for its London office.
The superannuation industry has been facing pressures to increase returns, resulting in a consolidation of small and mid-sized funds.
Globally, asset owners have been seeking to internalise portfolio management, particularly for equity investments. A recent report by Global SWF found that internally-managed assets are more likely to generate higher financial returns than outsourced ones.