Sevior's new fund draws $1.2b in equity mandate
Set up a year ago, Airlie counts among its clients $65 billion industry fund AustralianSuper, which gave it $1.2 billion for Australian equity investments in the year to June.
Airlie also invests $542 million on behalf of $23 billion industry super fund CBUS, comprising 2.4 per cent of its Australian share investments. The $13 billion industry super fund HOSTPLUS said Airlie's mandate as at June 30 was $90 million.
Co-founder and managing director David Cooper told BusinessDay Airlie had seven employees, seven institutional clients and about 100 high-net-worth individuals as clients.
Airlie was formed after Mr Sevior departed as head of equities at Perpetual Investments in 2011, prompting a flow of money from the wealth manager.
AustralianSuper investment manager Joseph Wahba said Messrs Sevior and Cooper were a known quantity, and the fund was satisfied Airlie would do what it said it was going to do.
Perpetual Investment remains a huge Australian equities manager for AustralianSuper, managing $2.32 billion in 2012-13, up from $1.6 billion the previous year.
However, AustralianSuper signalled the push towards internal management - as seen at the $36.3 billion super fund UniSuper - was gathering pace. "Over the last year, we've appointed 28 investment professionals across a variety of roles in the investment management function," AustralianSuper said in its latest annual report.
"It is expected internal management will commence in Australian equities, infrastructure and property first, with other asset classes to follow progressively over the next three years.
"Our recent recruits and existing investment team are experienced investment professionals. All bring a breadth and depth of investment knowledge to complement our external fund managers, who will continue to manage members' money in our hybrid investment model."
The report shows that AustralianSuper's flagship balanced fund returned 15.63 per cent in the year to June, a touch over the industry average. Over five years, the return was 4.2 per cent; the 10-year return was 7.64 per cent.
But AustralianSuper, which has more than 2 million members, delivered a cautious outlook.
"We believe the next year will see a return closer to long-term investment performance averages," chairwoman Heather Ridout and chief executive Ian Silk said.
"Continuing volatility, improving sentiment in the US and ongoing growth in China should provide opportunities to increase our investments in global share markets, particularly developed markets, at lower prices."
Mr Silk's total pay for 2012-13 was $611,339.
After a heated start to to this year about tax concessions for super, AustralianSuper reiterated its support for increasing the compulsory super guarantee to 12 per cent over time, and refunding tax paid on super to low-income earners.
These policies, introduced by the previous Labor government, have had muted or no support from the new government.
Frequently Asked Questions about this Article…
Airlie Funds Management is a start-up fund manager set up by John Sevior. According to the article, it secured a A$1.2 billion mandate from the country’s biggest superannuation fund, AustralianSuper, for Australian equity investments in the year to June.
Airlie’s clients include large industry super funds and high-net-worth individuals. The article says AustralianSuper gave Airlie A$1.2 billion for Australian equities, CBUS has A$542 million invested with Airlie (about 2.4% of CBUS’s Australian share investments), and HOSTPLUS’s mandate with Airlie was A$90 million as at 30 June. Airlie also reported about 100 high‑net‑worth clients and seven institutional clients.
Airlie was formed after John Sevior departed Perpetual Investments, where he had been head of equities, in 2011. David Cooper is co‑founder and managing director. The article notes Sevior’s departure prompted a flow of money from Perpetual, and institutional clients cited the managers as a “known quantity.”
AustralianSuper’s investment manager Joseph Wahba told BusinessDay that Messrs Sevior and Cooper were a known quantity and the fund was satisfied Airlie would deliver on its stated approach. That institutional confidence helped secure the A$1.2 billion mandate.
AustralianSuper signalled a shift toward greater internal management. The article says the fund appointed 28 investment professionals in the year and expects internal management to commence in Australian equities, infrastructure and property first, with other asset classes to follow progressively over the next three years. It will operate a hybrid model where external managers continue to manage some money.
The article reports AustralianSuper’s flagship balanced fund returned 15.63% in the year to June, slightly above the industry average. Its five‑year return was 4.2% and the ten‑year return was 7.64%.
AustralianSuper’s chairwoman Heather Ridout and CEO Ian Silk gave a cautious outlook, saying they expect returns closer to long‑term averages over the next year. They noted continuing volatility, improving US sentiment and ongoing growth in China could create opportunities to increase global share market investments at lower prices.
The article says AustralianSuper reiterated support for increasing the compulsory Super Guarantee to 12% over time and for refunding tax paid on super to low‑income earners. It also noted those policies, introduced by the previous Labor government, had muted or no support from the new government.
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