AustralianSuper’s digital transformation

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[SUDHIR NAIR] Tell me a little bit about AustralianSuper's recent digital transformation. What's been the impact overall and how has it really benefited the end investor?

[PETER CURTIS] We have sort of been looking at this digital transformation through two lenses. One, what we're doing to interact with our members. So, we have a digital app that the members can use and see their balances, do transactions on, and interact with us. We also have the website and both of these are critical to our whole digital interaction with the members and helping them on their journey as they go through accumulating their funds with AustralianSuper. So, we've been doing a lot of work to ensure that those channels are working effectively with our members and that we're constantly changing them and updating them to meet the ongoing needs of the members.

And then secondly, like all organizations I guess, we've had digital transformation internally, and that's really allowed us to keep operating during this interesting two and a bit years that we've been through. So, we shifted completely to working remotely. We're very pleased that there were no interruptions to our daily processes that allowed our members monies to be invested and to deliver the investment returns to them so they can increase their balances.

Your focus on your members has been unwavering in the many years that I've known you. During that time, AustralianSuper has experienced stellar growth. What do you think has really accelerated that growth and created momentum for the fund? And overall, what do you think has made it successful?

I think for AustralianSuper, it really comes down to two key matters for us. The strong brand that we have in place, this has given us enormous presence within the Australian market. I think also the way in which the organization has conducted itself, we have a strong trust from our members in what we do and how we do it. Australia's been subject to a number of inquiries and we have benefited from our open and transparent nature in which we interact and invest our members’ funds. And I think that's being supported by our long-term investment performance that we deliver to our members. Our long-term rankings have us in the top handful of funds in Australia over 5, 10, 20 years. So that has really made the proposition that we provide for our members to be very compelling. We've also had some industry consolidation going on within Australia, and that's being driven by the regulator within Australia looking to ensure that Super funds are providing scale to their members and that is making smaller funds look at what their options are going forward as well.

I know that last point has resulted in a whole lot of change, not only for the industry, but for your members and ultimately for AustralianSuper. You talked about the digital transformation a moment or two ago. When it comes to the investment strategies, how do you think about, how do you categorize the role that technology fundamentally plays within the investment process?

Technology, as you'd expect, pretty much underpins the investment process. So, it's all about getting the right information to the investment teams at the right time so that they can make the decisions which they need to make about where they want to allocate the funds and what's going on in the market. So, technology is critical for us in leveraging the data that's available, allowing people to run their simulations around risk and returns in developing quantitative investment strategies to support where we are allocating the money, as well. As we've started to step offshore and establish our global footprint, it's really been a matter about providing information anytime, anywhere to our investment people as they travel to meet companies, to look at investment opportunities, to undertake due diligence on investments in which we wish to purchase. We're also seeking to use technology to improve our straight through processing, to remove operational risk from our processes, to make sure that we're operating effectively and can continue to scale our operations as we continue to grow the amount of members’ money that we're looking after.

I know AustralianSuper believes that investing in companies with good ESG management provides better long-term returns for its members. How do you approach sustainable investing?

AustralianSuper moved into the whole ESG space quite early, when I look back on it, and it was very much at that stage about ensuring that the governance within the companies that we invest into was being appropriately managed and that we were talking to the companies that we invest into about what they're doing and the returns it's providing for our members. We very much see ESG as another set of risks, which we need to manage, to both protect our members assets and also to enhance the value of those assets. So ESG for us is very much integrated into the investment process as a critical element of what we do. A few years ago, we started to develop what we call our asset owner policy, and that really sets out what companies should expect from us when they see us turn up on their register and that we are holding their stock. And that's whether it's a listed investment or an unlisted investment within the portfolio. So, we engage actively with our companies that we invest with. We talk to them about the whole range of ESG issues, and we also incorporate a number of ESG factors in our due diligence processes for our investments in private markets. And we've had situations where we will engage with companies to get improved outcomes for the assets that we hold within the portfolio.

And as we've worked together, I've admired the way that ESG and sustainable investing is truly integrated into all aspects of AustralianSuper's business process, maybe staying with that theme and looking out into the future. Given everything that we talked about, what are you most excited about over the next two to three years?

I think for our organization, it's very much around the growth of what we're doing. We're very privileged that in Australia we are looking after about 10% of everybody's salary has to be invested into superannuation, and that will grow to 12% over the next few years. So that means our level of members’ assets, we will double every four to five years. So, we've just completed our strategy out to 2030, and we expect that will show us getting close to a trillion dollars of assets. So, for us, it's really how do we ensure those assets are looked after and get the best outcomes for our members? How do we scale our processes so that we get the best returns and also the lowest costs back to our members, so that we maximize very much their retirement balances. As we continue to grow, we started to expand globally. That's one of the reasons I'm here at the moment. We're expanding our global footprint, and it's very much about building out those global offices and finding the opportunities to deploy the capital for our members. So, it's a very exciting outlook for us. The world continues to be an exciting place to be, and we're looking for the best investment opportunities for our members’ assets.