Aware Super is Australia’s third largest profit-for-member industry superannuation fund, with AU$ 175 billion (US$ 114 billion) under management on behalf of 1.2 million members and a brand-new office in London. We had the pleasure of speaking with its CEO, Ms. Deanne Stewart, about the fund’s strategy, future objectives, female leadership and how the industry needs to evolve to meet future retirement needs.
[GSWF] What makes Aware Super unique among Australia’s superannuation funds?
[AS] Aware Super is a AU$175 billion super fund that started in 1992 out of the NSW government and merged with like-minded funds to create who we are today – a profit-for-member super fund with Australian essential workers at our heart. We have done a lot of work around helping members get ready for retirement and are heavily focused on digital transformation and Responsible Ownership, which has allowed us to deliver strong returns.
[GSWF] Are there more acquisitions in the horizon and what is Aware’s projected AuM by 2030?
[AS] Over the next 5-10 years, there will certainly be some more consolidation in the marketplace across Australia. Merger opportunities give far better direct access to investment opportunities globally and we’re therefore able to drive the fees and the cost down, while also enabling the Fund to invest so much more in things like technology, cyber security, really simple operations and processes. In that context, we will continue to look for additional merger partners across Australia.
[GSWF] What is Aware Super’s overall asset allocation and split between domestic and international assets?
[AS] Our current portfolio is allocated to fixed income (15%), listed equities (55%), and alternative assets (30%), of which about half is in Australia. We’re unique in that most of our money sits in our high-growth option, due to our lifecycle product that generates the best potential return for members up to the age of 55 – and we estimate that this creates an additional AU$ 30k-50k for retired members.
[GSWF] The High Growth plan returned 12.3% in FY23, and 8.6% over 10 years - is that figure sustainable in the long term?
[AS] To make sure we stay as one of the top performing funds in Australia we’ll focus on our ability (i) to attract and retain top investment talent and a diverse workforce; (ii) to have strong data and technology capabilities for our investment teams; (iii) to expand globally with our new offices in London and in the future, the US; and (iv) as we have an internalization of up to 60%, we need to ensure we partner with the best and most aligned managers, especially when it comes to ESG.
[GSWF] What is Aware Super’s ultimate goal with its new office London? What are your thoughts about Asia?
[AS] Over the next 5-10 years, we expect to direct AU$10 billion to property, infrastructure and private equity assets across Europe, to tap into megatrends and themes including energy transition, affordable housing, innovation, life sciences, tech, digital infrastructure, and importantly, ESG. In Asia at the moment, most Australian funds are at level mostly through index or fund investments. In the future, we expect to see more active opportunities, especially around property. All in all, we expect to increase the % of our overseas portfolio.
[GSWF] Only 1 in 10 CEOs and only 1 in 20 CIOs of a Sovereign Investor are women – what do you think of these stats?
[AS] I think the figure is dismal and we can and should look to improve dramatically, because ultimately having really strong diversity at the leadership table, CEO's table or investment table, ultimately means you bring way more diverse perspectives, ideas and ultimately better returns and performance. Change must come from the very beginning, when boys and girls choose their majors, we should be encouraging girls to go into STEM. We also need to make sure that our organizations are family-friendly in their policies, etc. At Aware Super, we are doing a lot in the space to attract and retain more female talent, including superannuation for both paid and non-paid parental leave, recruiting thresholds and menopause leave.
[GSWF] Personally, you have been the CEO of Aware Super for 5.5 years now. What are your main goals for the next 3-5 years at the helm of the fund?
[AS] We are really keen to lead the way in reimagining retirement. As five million Australians move into or near retirement, we really want to lead the way in assisting our members into that new phase by means of technology, innovation and investment returns.
