POWERED BY MOMENTUM MEDIA
Super industry needs to adapt to cope with mega-funds: KPMG
There are expected to be eight funds with more than $125 billion in funds under management by 2025, according to KPMG.
In its Super Insights 2022 report, KPMG said there were 12 funds managing more than $75 billion and that this would likely increase to $125 billion as the volume of assets grew.
Similarly, total pension payments were expected to increase to $100 billion by 2040, up from $30 billion now.
“This system growth requires super funds to consider their investment strategies and governance arrangements. It is fair to say there is an operational need for investment governance arrangements to become more efficient, proactive and adaptive to internal and external market factors.
“The anticipated rate at which net system inflow capital will need to deploy into active/passive investment strategies has not been seen in the Australian system at the levels anticipated over the next 10 years and historic decision-making frameworks will need to evolve at pace.”
This would require super funds to improve access to investment opportunities, realise economies of scale, address mandate constraints and enhance internal capabilities.
It was also critical that funds maintained strong investment governance arrangements, continue to invest in portfolio management and risk systems, optimise custody arrangements of investment data and consistently look to improve accountability for delegated investment decisions.
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 super fund announced that Gregory has been appointed to its executive leadership team, taking on the fresh role of chief advice officer.
The deputy governor has warned that, as super funds’ overseas assets grow and liquidity risks rise, they will need to expand their FX hedge books to manage currency exposure effectively.
Super funds have built on early financial year momentum, as growth funds deliver strong results driven by equities and resilient bonds.
The super fund has announced that Mark Rider will step down from his position of chief investment officer (CIO) after deciding to “semi-retire” from full-time work.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
DomaCom DFS Mortgage
76.97 3 y p.a(%)
2
Global X 21Shares Bitcoin ETF
76.46 3 y p.a(%)
3
UBS Solactive Global Pure Gold Miners UCITS ETF Dis USD
51.13 3 y p.a(%)
4
Global X GlobalX FANG+ ETF
45.15 3 y p.a(%)
5
Select Baker steel Gold Institutional
43.78 3 y p.a(%)
