State Super, the $43 billion NSW Government fund, which fits in the TCorp family, is restructuring its senior management, in the process creating four new investment roles. John Livanas, the chief executive, said the new roles included two executive positions and two senior management positions.
The new roles are:
- Deputy CIO and GM Defined Contribution (DC) Investments
- General Manager Defined Benefits (DB) and Liabilities
- Senior Manager Responsible Investing, and
- Senior Manager Investment Risk.
Livanas said the positions would report to an “augmented” CIO role. “The new structure will provide clear accountability and additional oversight of the investment strategies, implementation and performance for each of the highly complex funds, in what is becoming a more challenging investment environment,” he said.
The Deputy CIO and GM DC Investments will be accountable for the $8 billion in DC member funds, with the challenge to manage seven investment options, all with negative cashflow and shortening duration.
The GM Defined Benefits Assets and Liabilities will be responsible for overseeing the actuarial evaluation and setting the investment strategy and risk parameters for the various liabilities within the DB, which include lifetime pensions, insurance arrangements and short duration lump sum payments. In addition, this role will be responsible for the TCorp relationship – the Master Investment Manager for the DB funds.
The two new roles of Senior Manager Responsible Investing and Senior Manager Investment Risk, will complete the senior management in the new investment structure.
As a result of the changes, the senior management roles needed to be spilled, Livanas said. Richard Hedley, the current CIO and Charles Wu, the current GM Assets and Liabilities are expected to apply for the enhanced roles of CIO and Deputy CIO and GM DC investment.The role of Senior Manager Responsible Investing is expected to be announced shortly.
Livanas also noted that by consolidating the responsibility for TCorp within the investments team, the role of GM Vendor Management was no longer viable and Aneesa Samuel would depart the organisation at the end of September. Her responsibilities relating to Mercer Administration Services will be assigned to Nada Siratkov – GM Member Engagement.
Livanas said the changes to the investment structure were reflective of both the maturation of the State Super portfolio, and the move by TCorp to a total portfolio approach.
“Over the next five to 10 years, our portfolios will be challenged with the multiple requirements,” he said. “These include the need to achieve strong investment returns while managing a steepening redemptions profile and liquidity challenges for the DC funds, as well as managing to a shortening duration to 2030 when the DB needs to be fully funding.
“It is now more important than ever to further support the capabilities of State Super’s investment team so as to empower them to deliver the best outcomes for our 100,000-plus members.”
He said that all the investment funds had, to date, delivered returns in the top two quartiles across all metrics, and had made their objectives with significantly lower risk and in spite of significant cash outflows. This was also after costs of the sophisticated derivatives hedging programs were taken into account. These programs are designed to moderate the investment risks in portfolio. State Super is one of the leaders in significantly employing derivatives to hedge risks.
Livanas expects that the new roles would be finalised quickly.