POWERED BY MOMENTUM MEDIA
Balanced in-house management can lead to lower costs
Veteran superannuation chair, Gerard Noonan, believes super funds need their balance their desire to internalise with external management but, over time, it will reduce the cost of investing for members.
Speaking on a podcast for the Australian Institute of Superannuation Trustees (AIST), Noonan, who was a former chair of Media Super until September 2020 and former AIST president, said funds were increasingly looking to manage assets without third-party managers.
Moving management in-house had been a popular move recently although funds were divided on its benefits as it also came with drawbacks such as talent retention. UniSuper, for example, had more than 70% of its fund managed in-house while others such as Hostplus preferred outsourcing the task.
Noonan said: “Funds now increasingly are saying, ‘Look, why do we pay so much to fund managers? Why can’t we manage the assets ourselves?
“We don’t necessarily want to do the whole lot ourselves. We can get a balance there. But I think over time, you’ll see the cost of investing slowly drop, and that will include external managers as well.”
Having worked as a journalist for 40 years on titles such as the Australian Financial Review and Sydney Morning Herald, he also reflected on the importance of the equal representation model between employer and employee.
“I’ve been on these boards for the best part of three decades. And there’s been terrific cooperation between the employer representatives and union/employee representatives. I’ve never seen anything divide along employer and employee lines as far as decision making is concerned,” he said.
“And the reason is that we’re fiduciaries, we understood our tasks and our responsibilities. There was sometimes a little bit of the natural tension that occurs in the industrial relations world. And so we kept each other honest by making sure that we had the interests of our members at heart.”
AUTHOR
Laura Dew
Laura Dew is editor at Super Review. Prior to joining SR, she spent five years working at Investment Week in the UK covering asset and wealth management.
Recommended for you
The profit-to-member super funds are officially operating as a merged entity, set to serve over half a million members.
Super Review announced 21 winners at the annual Super Fund of the Year Awards, including the recipient of the prestigious Fund of the Year Award.
A research firm has given UniSuper a glowing review, praising its strong leadership and “compact team”, as well as its “creditable governance” structure.
Assistant Treasurer Stephen Jones has defended the government’s plan to modestly cut tax concessions for Australia’s wealthiest superannuation accounts, saying it is a “fairer outcome”.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Spire Oaktree Opportunities XI Second Close
61.07 3 y p.a(%)
2
Spire Oaktree Opportunities XI First Close USD
59.21 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
32.57 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
32.09 3 y p.a(%)
5
DomaCom 4/27 Crombie Avenue Bundall QLD 4217 Australia
27.42 3 y p.a(%)
