Australia’s new second largest superannuation fund does not plan to follow some of its peers into major internalisation of its investment programs.
The $220 billion Australian Retirement Trust (ART) officially came into existence on 28 February, with the completion of the merger of Queensland funds QSuper and Sunsuper. ART is now only smaller than the $260 billion AustralianSuper fund.
ART’s chief executive is Bernard Reilly, the former chief executive of Sunsuper. Reilly joined the super fund in 2019 after a career in international banking and finance, in Australia and overseas.
Reilly said ART would continue its predecessor funds’ direct investment infrastructure investment strategies and, in line with its increased scale, would consider even larger investments.
ART is involved in the $24 billion bid for Sydney Airport (ASX: SYD), as QSuper was one of the industry super funds that backed IFM Investors and Global Infrastructure Partners when they initiated that bid. ART is also a direct investor in mobile phone transmission entity Telstra InfraCo Towers. Sunsuper was part of a consortium, including the Future Fund and the Commonwealth Superannuation Corporation (CSC), which took a 49% stake in that business last year.
Reilly expects the fund will continue to use external managers well into the future. ART’s larger scale would, however, be used to help it drive down the costs of using external managers.
Reilly expects ART to double its size to become a $500 billion fund by the end of the current decade with member numbers increasing from the current two million to 2.8 million.
The combined business has 75% of its members in Queensland. The members are relatively young with around 40% aged under 35 and a further 40% aged 35-55.
ART anticipates some of its growth will be generated by absorbing smaller funds. Australia Post has already agreed to transfer its super fund to ART. Already the largest single provider of superannuation for Australian corporations, ART has tenders outstanding to manage additional corporate funds valued at around $5 billion.
ART’s investment activities are being run by former Sunsuper chief investment officer Ian Patrick. Patrick held that role for six years and is a former chief executive of JANA Investment Advisers.