Australian Institutional Funds Grew More Than Global Peers

September 6, 2011 ( – Latest research from Towers Watson and Pension & Investments shows in 2010, the growth in assets of major Australian institutional funds more than doubled that of their global peers.

The P&I/Towers Watson Global 300 Ranking shows Australian funds grew by 26% in 2010, 11 Australian funds were added to the Global 300 Rankings—the highest of all countries—with Australian funds accounting for 3% of the assets in the survey. 

Martin Goss, Senior Investment Consultant at Towers Watson in Australia, said in a press release: “The growth rate for Australian funds in the Global 300 Ranking over the past five years has been supported by a number of factors. These include ongoing merger activity in the superannuation industry, positive net cashflows into the superannuation system as a result of mandatory superannuation contributions (the full effects of which are still being played out), and the seeding of the Future Fund in 2006. Other factors that have played a significant role in the growth of Australian assets over the past five years include the strong performance of Australian equities relative to global equities combined with the home country bias of many Australian investors, the relatively high allocation to diversifying alternative assets, and the appreciation of the Australian dollar relative to the U.S. dollar and the Euro.”

There are fifteen Australian funds in the Global 300 Ranking this year—the same as last year—and all of them have climbed up the ranks as a result of strong growth in the size of their funds under management. They have a combined asset size of U.S. $368 billion and they are as follows: the Future Fund (ranked 35), AustralianSuper (78), State Super (93), QSuper (99), UniSuper (105), First State Super (154), ARIA (159), REST (160), SunSuper (175), Hesta (179), ESSSuper (189), Cbus (191), Super SA (253), GESB (268), and Telstra Super (274). 

Goss added: “Looking to the future, Australian funds are expected to maintain their growth trajectory, with a number of high profile mergers during 2011. Hand-in-hand with this increase in fund size we are seeing increasing investment sophistication in Australian funds, with more use of internal expertise, further expansion into alternative assets at the expense of equities and more control by funds over their fund managers when designing and implementing investment strategies and structures.”