POWERED BY MOMENTUM MEDIA
Researcher projects surge in internally managed super fund FUM
A projected surge in internally managed super fund FUM will “transform” Australia’s investment management landscape, according to new research.
Seventeen per cent of funds under management (FUM) across APRA-regulated superannuation funds were internally managed in 2023, recent analysis from Rainmaker Information has shown.
According to the research house, this figure could grow to 43 per cent over the next two decades.
Larger super funds also displayed a higher inclination towards internal investment management, with current key players including UniSuper, AustralianSuper, Aware Super, Australian Retirement Trust, and Cbus.
This is a significant finding as increasing market concentration among super funds is set to expose more of the market to the investment strategy.
Namely, Rainmaker analysis showed that the biggest five super funds collectively represented half of the market in 2023. Moreover, the 10 largest funds accounted for 75 per cent and the top 20 accounted for 95 per cent.
“This is significant because super funds managing over $100 billion currently manage 31 per cent of their FUM internally, surpassing the internal management proportion for funds in the $50–100 billion range by one-and-a-half times,” the firm said.
Meanwhile, not-for-profit (NFP) super funds – which are poised to grow their market share from 72 per cent to an anticipated 85 per cent by 2043 – managed almost a quarter (23 per cent) of their FUM internally.
However, this only remained a prevalent practice among private sector NFP super funds, while public sector NFP super funds exhibited minimal engagement in this strategy.
“Rainmaker Information projects only 15 per cent of institutional superannuation FUM will be held within retail super funds by 2043, which will drive one-third of all FUM into internal investment management,” commented Alex Dunnin, the firm’s executive director of research and compliance.
According to Dunnin, this shift will “transform” Australia’s investment management landscape.
“With super funds internally managing larger portions of their multitrillion-dollar investment portfolios, more FUM will become ‘uncontestable’ for investment managers. While this will challenge the business models of many investment managers, it will create opportunities for others,” he concluded.
AUTHOR
Jessica Penny
Recommended for you
Governor Michele Bullock took a more hawkish stance on Tuesday, raising concerns over Donald Trump’s escalating tariffs, which sent economists in different directions with their predictions.
Equity Trustees has announced the appointment of Jocelyn Furlan to the Superannuation Limited (ETSL) and HTFS Nominees Pty Ltd (HTFS) boards, which have oversight of one of the companies’ fastest growing trustee services.
Following growing criticism of the superannuation industry’s influence on capital markets and its increasing exposure to private assets, as well as regulators’ concerns about potential risks to financial stability, ASFA has released new research pushing back on these narratives.
A US-based infrastructure specialist has welcomed the $93 billion fund as a cornerstone investor.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Global X GlobalX FANG+ ETF
33.51 3 y p.a(%)
2
Spire Oaktree Opportunities XI Second Close
32.68 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.62 3 y p.a(%)
4
Spire Oaktree Opportunities XI First Close USD
31.36 3 y p.a(%)
5
Fidante Credit Suisse Global Private Equity
29.60 3 y p.a(%)
