The Source

Chandu: I grew up in a family that had the right balance and discipline when it came to understanding money – you earn, you spend some, you save some and you give some. And the piece that I added on as I got older was you insure or protect some.

Ultimately, it all starts with cashflow and for most working adults your career is likely to be your biggest asset. So, while not a direct money lesson growing up, I was always told about the importance of getting a good education and working hard so you build a career that provides better spending, saving and giving choices.

Another important lesson I learnt at a young age was the power of compounding. So, relating this back to super, the earlier you start you can get a snowball effect where your returns start earning their own returns which means your investment can grow exponentially over time. In fact, it’s often been said that compound interest is the eighth wonder of the world!

Chandu: I think one of the biggest misconceptions is that super just runs on autopilot; that it’s something you can put aside and only worry about later, when retirement is close.

For some members, super can feel distant and long term. The reality is that behind the scenes, retirement outcomes are shaped by decisions made by our investment team every day that markets are open.

At AustralianSuper, this means actively managing members’ savings across a wide range of investments, constantly assessing risks and opportunities, and taking a long term view. We draw on deep internal expertise, including specialists in areas like Australian equities, and work closely with leading external investment managers around the world.

Being the largest super fund in Australia, and the 17th largest globally², we’re a true global asset manager that attracts world-class expertise and talent. Our growing global footprint – with offices in London, New York and Beijing provides us with a competitive advantage, ensuring members are able to access investment opportunities similar to some of the world’s billionaires.

Chandu: Liquidity is simply the ability to turn investments into cash quickly and when it’s needed.

For a super fund, it means having cash on hand to pay member benefits, meet our currency obligations and also have cash available to take advantage of market opportunities.

Cash in the bank account is the most liquid asset as it’s available immediately. Ideally, you don't want to be selling your good long-term investments at the wrong time, so we make sure we have enough levels of cash and other liquidity sources available – and the quantum of cash held is largely informed by our stress testing.

Chandu: It’s making sure members can always access their money when they need it, while still investing for strong long term returns.

I call it the 'Goldilocks' challenge of finding the right balance – not too much, not too little. Holding enough liquidity to keep members’ savings safe and accessible, without holding so much that it negatively impacts performance.

My role is to help find that balance and ensure we have the highest standards in risk and liquidity management. Along with my team, we use stress testing, analytics and different market assumptions to determine how much liquidity we need to hold. At the same time, we make sure that we have the flexibility to invest when opportunities arise.

Another important aspect of the role is being a strong advocate for members. As more members move from building their super to drawing on it in retirement, it’s critical we can support that transition with confidence. This means working with regulators and the Reserve Bank to ensure we’re all aligned and focussing on the right things.

Because a large share of members' funds are invested overseas, my team also manages currency exposure and ensures capital is available when needed. This means members’ savings continue to be managed and invested in line with each option’s long-term objectives.

Chandu: We’re investing in our liquidity and risk management capability to help take the right level of risk to grow members’ savings.

That includes building strong teams with deep experience, both in Australia and internationally, so we can draw on a broad range of perspectives and expertise.

Having a global footprint means our investment team can be focussed 24 hours a day on members’ savings, while markets are open. When Australia goes to sleep, London and New York are open, ensuring we’re able to capitalise on market volatility or opportunities overnight. Not having this global capability means you potentially lose 8 hours of market opportunity. That’s quite a large competitive advantage for our members. They can sleep well knowing there are people working around the clock seeking to protect and maximise their retirement savings.

Chandu: The role is a first in the superannuation industry and it's really recognising that the industry has matured in scale and sophistication and that at some point in the future it will transition from accumulation to retirement. Today the super system manages trillions of dollars invested around the world and in diversified asset classes from fixed income, listed equities, infrastructure and private markets. In addition, the industry is now increasingly supporting a growing number of members drawing down on their savings in retirement.

AustralianSuper is taking a leadership role in this journey ensuring our members achieve their best possible position in retirement. We continue to be strong advocates for members, making sure we’re prepared not just for today, but for where the Fund and its members are heading over the coming decades.

The strong focus on liquidity management should provide members with confidence that there’s a team of experts here to keep AustralianSuper resilient through all market cycles, with the flexibility to take opportunities when they arise to put members in the best financial position.