Insourcing IM has made big super funds more agile

Major superannuation funds which insource their investment management are finding the cost savings and investment agility so compelling that they are most unlikely to ever return to outsourcing arrangements.

That is the bottom line message delivered by the chief investment officers of two major industry funds – Cbus and AustralianSuper.

Discussing insourced investment management during the Frontier Advisors annual conference, AustralianSuper chief investment officer, Mark Delaney pointed to the savings that had been achieved from bringing investment management in-house in 2013/14.

What is more, he said that a significant proportion of those savings flowed from having more control over how money was moved around the system.

However, both he and Cbus chief investment officer, Christian Fok acknowledged that bringing investment management in-house was not a decision to be taken lightly by superannuation funds.

They said it was a question of having the capacity and the ability to execute.

“The question is, can you realistically do it,” Delaney said.

He said one of the upsides for him as a CIO was the speed at which decisions could be made in terms of moving portfolios around because there were fewer external consultants to deal with.

“You can simply move money around far more quickly,” Delaney said.