HESTA expands internal portfolio handling

Industry superannuation fund, HESTA, has announced close to 10 per cent of its portfolio containing $74 billion in funds under management (FUM) is now being managed by an in-house team.

The fund has grown to now manage $7 billion of its portfolio internally since implementing its internalisation strategy in December 2021 with part of its Australian equities portfolio, which also now accounts for $4 billion.

HESTA’s new process was designed to incorporate quality, growth and sustainability, and was also applied to the internal fixed income and cash strategies that recently went live in June 2023.

“Growth in our internal capability has been backed by significant investment in our systems and governance,” HESTA CIO, Sonya Sawtell-Rickson, said

“We plan to further grow our fixed income strategies and extend internal management to Australian equities in our Sustainable Growth options.”

To align with the fund’s growth, Sawtell-Rickson also said HESTA would continue to work with external investment managers as part of a hybrid strategy.

“We’ve been fortunate to attract some of the best and brightest minds to our investment team, but we don’t intend to do everything ourselves,” she said.

“We want to continue partnering with leading external investment managers that bring unique insights that challenge and inform our thinking across the portfolio.”

HESTA chief executive, Debby Blakey, said the strategy’s success has resulted in more operational efficiencies and enhance market intelligence to deliver strong investment performance.

“Our internalisation strategy is helping to deliver value for our members: building our internal teams gives us greater agility and flexibility, which means we can move quickly on more investment opportunities, and at a lower cost to members,” she said.

“As a long-horizon investor, our internal teams bring market intelligence to the table that’s helping us make smart investment decisions during times of market volatility and identify that next wave of opportunity.”