The changing role of a super CIO

The CIO of Australian Retirement Trust (ART) and deputy CIO of Cbus have shared their insights on how the CIO role is changing with internalisation and their thoughts on international expansion.

Speaking on a panel at the Association of Superannuation Funds Australia (ASFA) annual conference in Adelaide, the pair discussed trends in the CIO space. 

A change with the move towards internalisation was around how much time they were able to spend on investment decisions. Both said making investment decisions makes up less than 30 per cent of the CIO role with more focus put on team leadership, culture, and structures.

“The CIO is a leadership role, they are the ultimate leader of the investment team so it is not surprising they spend less time on asset allocation decisions. The important thing is to surround themselves with asset class specialists and be the leader to bring it all together rather than making individual decisions,” said Cbus deputy CIO Alexandra Campbell.

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Ian Patrick, ART CIO, said out of 160 investment decisions made by ART in the last 12 months, he had only been involved in around 45 of those, some 28 per cent.

“If you don’t have the culture and the structures in place to enable those 160 decisions to take place, which is where I think my time is more valuable, you aren’t going to get good decisions. It’s not how much time, it’s about how good the outcomes are,” Patrick said.

Patrick also discussed whether ART will follow the lead of AustralianSuper and Aware Super in opening up a London office. He said ART’s role as hybrid investment manager meant it was less crucial as they could rely on third-party managers overseas for their expertise in international asset allocation. 

“It comes down to your investment model and we are running a hybrid model where implementation is effected through third parties or alongside partners so we don’t need to have a global footprint to be active in those markets,” Patrick said.

“If you are originating transactions and need to have networks in those offshore markets then you likely do need an office and a meaningful number of people there.

“Will we have an office beyond Sydney and Brisbane, most likely, but will that be to build teams of 100 people? No, it will not. It will be to supplement the advice back to the domestic business to allow it to be most effective it can be in terms of access to time zones.”

Meanwhile Cbus said it has around 50 per cent internalised currently, but doesn’t have a strict target in mind. 

“It’s about the quality of the portfolio rather than the quantity that are managed internally. For Cbus to deliver the best results for its members, it’s about leveraging our global relationship and getting the best value for the fees we are paying for that,” Campbell said.

“It’s great to not be fully internalized and to have hybrid relationship where we can do some things really well ourselves and then use our global relationships to do transactions that we can’t do alone.”