December’s most read: Canadian pensions eye build-to-rent; Future Fund hiring; family offices’ private asset plans | Asset Owners

Australia’s active managers lose ground as Vanguard moves into pension market

Active fund managers are facing intense pressure to perform and to lower their fees as investing institutions’ increasingly look to passive alternatives and take some portfolios in-house.

In Australia’s highly competitive funds arena, the question remains: How long can traditional active managers survive, given historical data showing very few are able to maintain a consistent performance over an extended period?   

That question took on added urgency after index fund giant and Australian market heavyweight Vanguard launched its own superannuation fund range last month.

Canadian pensions target build-to-rent sector in Australia

Up until a few years ago, the build-to-rent (BTR) multifamily residential sector in Australia was almost non-existent, according to George Agethen executive vice president and co-head of Asia Pacific at Ivanhoé Cambridge, the real estate subsidiary of the $290 billion Canadian pension fund Caisse de dépôt et placement du Québec (CDPQ).

“We started investing into Australia’s build-to-rent multifamily sector in 2021, and it is currently a sector that a lot of high-quality players are trying to build out in the country,” he said.

Future Fund plans to add 50 people to investment team

Australia’s Future Fund plans to add 50 people to its existing 80-strong investment team in the next few years, as the sovereign wealth fund tries to optimise its internal decision-making process and extract more alpha.

The hiring will focus on the internal development of the team instead of fishing externally in response to the talent crisis globally.

The fund thinks it is also the best way to maintain consistency in the investment process, which it calls “one team, one portfolio”.

AustralianSuper sees bleak outlook for global property

AustralianSuper, the country’s largest superannuation fund with A$263 billion ($175 billion) of AUM, has expressed a downbeat outlook on global property markets, while singling out Australia’s economy as relatively resilient when compared to other developed markets.

“In general, we are cautious about the outlook for valuations across most sectors of property,” Bevan Towning, head of property at AustralianSuper in Melbourne, told AsianInvestor.

He contrasted a bleak outlook for markets in the US and Europe with the fund’s more optimistic view on the sector in Australia.

Asian family offices continue to diversify into private markets in 2023

While Asia’s wealthy are sitting on a healthy pipeline of cash flow going into 2023, those diversifying into private assets are displaying different risk appetites for emerging technologies and cryptocurrency.

“They have a pretty good line of sight on cash flow from their operating businesses in terms of how much they can take out in the form of distribution, so they’re all set on that. What they want is a diversification largely into the United States and Europe on the private market side,” said Nadav Lehavy, director at HP Wealth Management.