An Australian pension fund overseeing A$37 billion ($28.5 billion) in assets is looking to hire investment staff to bolster its credit, infrastructure and property teams as it diversifies away from Australian equities.
Construction & Building Unions Superannuation, Melbourne, aims to bring more of its asset management in-house. It joins the A$100 billion AustralianSuper and the $57.5 billion UniSuper Management in growing their internal investment businesses.
“We want to make sure we have capacity to cover a broader part of the market,” Kristian Fok, executive manager, investment strategy at CBUS, said in Sydney. “We're hiring for capabilities in Sydney and Melbourne.”
The hiring plans, still subject to approval, come as investors across Australia's A$2.2 trillion superannuation pool comb for new ways to cut costs and beef up returns amid low yields. The industry regulator has encouraged mergers, which have contributed to an 82% drop in the number of funds in the world's fourth-largest retirement market over the decade to June last year, according to data compiled by SuperRatings.
CBUS, which primarily manages the retirement assets of construction and building workers, receives A$1.75 billion in new pension contributions each year from more than 741,000 Australians. Its default “growth” investment option was named Australia's second-best performing strategy for the year ended Dec. 31 after gaining 9.6% in the period, SuperRatings data show.
Around 45% of the fund is invested in equities, with nearly 25% in Australian shares, according to Mr. Fok. The hiring drive will aid its strategy to better diversify assets. “We acknowledge that still within the portfolio there's quite a bias toward equities,” Mr. Fok said.
The company is considering hiring investment personnel to support Linda Cunningham, who was appointed manager of debt last October, and Diana Callebaut, manager of infrastructure at CBUS, Mr. Fok said. It is also weighing adding more staff to its property, and investment strategy and innovation teams, he said.
The pension fund is also considering investing in “affordable housing” as it seeks to play a role in easing the nation's property affordability woes, according to Mr. Fok. Ms. Callebaut says the Australian government needs to “take leadership” on housing affordability issues and CBUS wants to be “part of the solution.”
CBUS expects to have 30 investment staff in Mr. Fok's team by June 30, double the 15 people from the same time last year.
“A number of the hires are just about incrementally adding to resources to the strategies that have already been approved,” he said.