Morningstar likes investment leadership at UniSuper

While research and ratings house Morningstar has been critical of investment team turnover at industry fund Cbus it has been highly approving of team stability and leadership of another industry fund, UniSuper.

In another analysis of a superannuation fund, Morningstar has delivered a strong endorsement to UniSuper chief investment officer (CIO), John Pearce who it says continues to be a major influence on asset allocation and thematic ideas.

It said Pearce has been instrumental in the development of UniSuper’s process and shift to internalised investment management since he arrived in 2009.

“Moving early and forging its own path has generated impressive results for the fund, driving fee reductions along the way. Pearce has been judicious in adding staff over time, relying on the team’s collaborative approach and willingness to lean on external strategic investment partners for input,” the Morningstar analysis said.

It said UniSuper has grown into a major domestic player, with assets exceeding $139 billion in 2024.

“It has astutely deployed capital at opportune moments, such as actively participating in bank capital credit raises in mid-2022 after spreads widened. Technology remains a strong theme targeted within equities, with the team being early investors in Nvidia,” Morningstar said.

“UniSuper has focused on leveraging its scale to make meaningful investment commitments to infrastructure, which currently has a heavy orientation to the airports. Relatively modest exposure to unlisted assets does make its strong track record more notable over the long term, given the volatility-dampening benefits of these assets.”

“UniSuper offers plenty to like, with its well-governed approach expected to deliver long-term success,” Morningstar’s analysis said.

Where Morningstar was critical of trade union influence on Cbus it was more relaxed about the make-up of the UniSuper board.

“Before becoming an open-offer fund in July 2021, it solely focused on being the superannuation fund for university staff. Accordingly, the lion’s share of the board– eight members–represents the universities and its staff, with three independent directors,” the analysis said.