3 August 2023
Eighteen months after launching its ambitious internalisation strategy, HESTA has expanded its in-house capability, which sees the $74 billion industry fund now managing almost $7 billion – or close to 10 per cent – of its portfolio internally.
HESTA internalised some of its Australian equities portfolio in December 2021 – employing a process designed around quality, growth, and sustainability – and has continued to scale the portfolio with the team now managing $4 billion in funds under management.
Its internal fixed income and cash strategies also went live recently in June 2023.
HESTA CIO Sonya Sawtell-Rickson said it was a significant achievement to have both the Australian equities and fixed interest and cash teams established and plans are underway to further scale the strategies over the next six to 12 months.
“Growth in our internal capability has been backed by significant investment in our systems and governance. We plan to further grow our fixed income strategies and extend internal management to Australian equities in our Sustainable Growth options,” Ms Sawtell-Rickson said.
Despite this recent growth, Ms Sawtell-Rickson confirmed the Fund would continue to operate a hybrid strategy.
“We’ve been fortunate to attract some of the best and brightest minds to our investment team, but we don’t intend to do everything ourselves.
"We want to continue partnering with leading external investment managers that bring unique insights that challenge and inform our thinking across the portfolio,” Ms Sawtell-Rickson said.
HESTA CEO Debby Blakey said the internalisation strategy has resulted in increased efficiencies alongside greater market intelligence helping build on the Fund’s track record of having delivered strong long-term investment performance for its more than one million members.
“Our internalisation strategy is helping to deliver value for our members: building our internal teams gives us greater agility and flexibility, which means we can move quickly on more investment opportunities, and at a lower cost to members.”
"As a long-horizon investor, our internal teams bring market intelligence to the table that’s helping us make smart investment decisions during times of market volatility and identify that next wave of opportunity,” Ms Blakey said.
HESTA is one of the largest superannuation funds dedicated to Australia’s health and community services sector. An industry fund that’s run only to benefit members, HESTA now has more than one million members (around 80% of whom are women) and manages close to $74 billion in assets invested around the world.