State Super’s Frontier deal creates investment competition

The major investment consultancies such as Russell Investments and JANA will face new competition as a result of the transaction which sees NSW’s State Super pick up 23% of Frontier Advisors.

The arrangement, being described as a strategic partnership, provides Frontier Advisors with an increased implemented consulting capability as a result of the State Super dedicated investment team now working within Frontier.

It also creates efficiencies within the fund.

The arrangement, which required the sign-off of the NSW Treasurer, Daniel Mookhey, had been months in the making and results in State Super having a seat on the Frontier Advisors board alongside industry fund heavyweights AustralianSuper, Cbus, Hesta and FirstSuper.

The announcement said that the transaction would “facilitate the movement of State Super’s dedicated investment team inside Frontier to create a new Independent Chief Investment Officer, or ‘ICIO’ service, to best support members”.

Commenting on the move, State Super CEO John Livanas said the collaboration between State Super and Frontier will provide members with continuity and security by retaining access to the technical skills of the specialist team already managing their funds.

“We have a great team of professionals managing our portfolio, and as State Super enters into a new transition phase, we’ve devised a solution to retain this valuable investment team so members who’ve entrusted their retirement savings to us receive a continuity of service” Livanas said.

The announcement described it as an “inventive solution [which] will deliver greater opportunity for career growth and professional development for State Super’s dedicated investment team, ensuring continuity for staff and allowing the team to remain focused on doing what they do best, delivering great outcomes for members.

“For the Fund, it will be a seamless transition with our innovative solution that enables current advisers and investors to remain operating exactly as they have for over a decade, whilst providing staff a wealth of new opportunities. Our members report a high level of satisfaction, and we are pleased that we can secure this proven capability for State Super and our members into the future.”

Frontier chief executive, Andrew Polson, said the arrangement ensures that State Super’s decumulation investment expertise remains unconflicted and continues to serve the best interests of its members.

“Frontier now has added capability and can provide investors with the benefit of retaining control over their own investment policy, strategy and portfolio construction while accessing institutional grade end to end investment services and to maintain our unconflicted advice model in the process.”