ART asset base could reach $500b by 2030
Australia’s second largest industry superannuation, Australian Retirement Trust (ART), could realistically achieve an asset base of half a trillion dollars by 2030, according to research and ratings house Morningstar.
In a new ratings assessment of the big Queensland-based fund, Morningstar analyst, Sharmi Popat said ART’s multisector strategies have a strong investment team managing a repeatable and scalable process in generating return outcomes for members.
The analysis said ART’s Chief investment officer Ian Patrick has been astute at leveraging the skills and experience of ART’s investment team, fostering an inclusive culture, and complemented by broad external consultant partnerships and a stable lineup of strategically selected asset managers.
“The externalization of the public markets assets allows for a deeper focus on the firm’s internalized private and real assets capabilities, which are well resourced and continue to prove their mettle,” it said. “That said, we do note the key-person risks related to the investments’ leadership team and especially the heads of the private and real assets.”
The Morningstar analysis said ART’s investment process is well designed and pragmatically applied to achieve return objectives.
“We think that the asset-allocation process has a robust set of quantitative and qualitative inputs in formulating its views. The firm wide manager-selection framework highlights the depth of analysis, and the limited turnover is reflective of effective manager selection.
“There is clear cognizance of capacity risks with an asset base of $304 billion as of June 30, 2024. These are mitigated through the 40%-50% exposure to passive/enhanced indexation within its public markets’ allocations. The scalability of this allows ART to use its risk and fee budgets in accessing high-conviction public market managers and optimising costs in private markets with its partners,” the Morningstar analysis said.
It said the global real assets and private assets (equity and debt) books are sizeable with commensurate risks and management needs in terms of liquidity, valuation, and execution, thus requiring more extensive due diligence and a focus on quality partnerships.
“ART has invested in the teams and functions accordingly. Fees overall are higher compared with peers and are a function of the external partnerships model, though positive return outcomes continue to benefit members.
“Overall, ART has a strong investment team effectively implementing a repeatable and productive investment process, warranting our continued conviction.
The recent DBFO announcement by Jones is a textbook example of spin and so-called “compromises” for the advice profession, cleverly masking a large-scale funds retention strategy by industry super funds. At the forefront of this push are industry giants like Australian Retirement Trust (ART) and AustralianSuper, two of the most powerful organisations in the country. Their goal? To expand their influence and secure control over members’ retirement savings indefinitely.
The plan is transparent: employ less-qualified advisers under the guise of “accessibility” and offer their services “free” through collective charging. These advisers will, unsurprisingly, steer members towards in-house pension products, locking their money into the industry fund ecosystem for life. This is not about empowering Australians with financial choice—it’s about consolidating control and eliminating competition.
Morningstar’s recent analysis of ART highlights its staggering growth trajectory, with a projected asset base of $500 billion by 2030. Armed with massive scale, a sophisticated investment process, and a government seemingly eager to do their bidding, ART and its peers are reshaping the financial landscape in their favour. Their resources allow them to dominate media and marketing, saturating the public with campaigns and now pushing for “free consultations” with their advisers. This marketing blitz, backed by government-endorsed regulatory changes, will undoubtedly shift the playing field even further in their favour.
The QAR review and Michelle Levy’s recommendations appear to have been co-opted into this strategy, perhaps unwittingly. By restricting the new class of advisers to simpler advice and tying them to prudentially regulated products, the government effectively blocks the retail super sector from competing. Industry super funds, however, are poised to capitalise, reinforcing their dominance through vertically integrated models that independent advisers and retail funds cannot match.
This is no longer just about financial advice; it’s a battle for control of Australia’s retirement savings. On one side, industry super funds wielding unprecedented power and a captured government facilitating their ambitions. On the other, the independent advice profession and retail super sector, left to fight for relevance on an increasingly uneven playing field.
Minister Jones appears entirely aligned with industry super interests, positioning himself as a facilitator for this transformation. The question now is whether the broader industry and public will recognise this for what it is—a monopolistic power grab disguised as reform—or whether industry super’s unchecked dominance will prevail.