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Bigger is not always better

Our scale puts us in the sweet spot of purchasing power and agility

16 Feb 2023

The superannuation sector has undergone dramatic consolidation, from more than 3000 super funds in 1999, to around 130 funds in 2022 . As more and more small- to mid-sized super funds are merged into ‘mega’ funds, is there a place for a niche fund like CSC? Absolutely.

At around AUD $60 billion funds under management, CSC is considered a mid-scale fund. This strikes the right balance of purchasing power and agility—we’re big enough to realise the cost and opportunity benefits of a large-scale investor, but not so it limits what we can invest in.

“One of the key principles of our investment strategy is to leverage these unique advantages to access opportunities that retail investors usually can't. Such as, innovative medical breakthroughs through our private equity investments, or new energy development in renewables infrastructure in Europe” said Chief Investment Officer, Alison Tarditi.

select asset exracts

“Our scale allows us to access a broad universe of investment opportunities, including both listed and unlisted assets, across most investment risk factors—if we don’t have a particular risk exposure, it is a deliberate investment decision, not because we are constrained by scale.”
“We prefer to focus where our knowledge and operational advantages enable us to access opportunities beyond the range of individual investors and where markets are far less efficient at pricing value.”

Our optimal size means we can be nimble with our innovations and risk management to ensure that our members’ savings are protected in volatile and uncertain environments, and we can re-allocate to capture the best relative returns throughout any market cycle.

“As well as assets with inflation linked cash flows—such as Amplitel mobile towers—we take a proactive interest in assets and businesses that are well positioned to benefit from long term productivity and secular trends. This makes our members’ savings much more resilient to fluctuations or disruptions in economic activity and growth that are cyclical,” Ms Tarditi said.
“Examples include private digital assets like broadband fibre internet providers across the United States, the Netherlands and also back home here in Australia via Uniti Group. Datacentres like the Canberra datacentres originally based in Canberra and now with extensions across Australia and across the Strait into New Zealand.”

Our scale also means that we can manage costs to ensure our members get value for money.

“Scale allows us to negotiate on fees and tailor terms and conditions on mandates to pay for what our customers need, rather than be forced into commoditised pooled vehicles.”

CSC is both robust and agile, encouraging us to be disciplined and focused on stewarding the retirement savings of our members, rather than managing the added complexities uninhibited growth can place on investment opportunities, business and operations. This is differentiating in an industry where growing fund size limits mega funds from accessing the most innovative parts of the economy.

The size of CSC’s investment portfolios is perfectly positioned to stay true to our purpose—building, stewarding and protecting retirement outcomes for all our members and their families. In short, our size means we effectively protect, as we grow.

 

[1] Source: APRA September 1999, June 2022 statistics - excludes SMSFs.

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