At a time when Asia Pacific’s pension funds need to modernise, expand and improve, having high calibre professionals in key roles will be vitally important.
For that reason, AsianInvestor has consulted leading pension fund experts, consultants, custodians and fund managers to put together a list of 20 pension executives who stand out in their field. The list which is being rolled out online over the next two weeks, is not ranked. Nor is it intended to be exhaustive. But hopefully it highlights why these particular executives in the region have so impressed their peers, business partners and colleagues.
You can also find out more about the rationale for our list. Today, we move on to executives from Australia and Japan.
Executive manager, investment strategies, Cbus Super
A longstanding executive at Cbus, the superannuation fund of the construction building union, Kristian Fok has been helping the fund bulk up its internal investing capabilities, following a strategic shift in 2016.
As Fok told AsianInvestor, “we identified that our model of outsourcing investments to external fund managers was unlikely to scale well given our strong cashflow growth”. So the pension fund has taken more investing in house, including asset allocation, international and Australian equities, infrastructure, direct lending, quantitative investment strategies and responsible investment. “This is an ambitious and complex program of change, which has required a co-ordinated effort across the fund,” said Fok, who has now been at Cbus for six years since joining from Frontier Advisors, Cbus’s long-time asset consultant.
The shift is part Cbus’s desire to raise its assets to A$50 billion ($39.44 billion) by 2020; they stood at A$43 billion as of June 2017. Plus the super aims to add to its 25% allocation to illiquid alternatives. “Over the next few years we can expect a ramp up in the amount of direct investing activity being undertaken by the fund and continued growth in the investments team,” said Fok.
His efforts have paid off so far; Cbus’s key MySuper fund returned 11.8% in 2017, while its five year average return to June 30, 2017 was 11.4%. Next, Fok aims to add to its 60-strong investment team.
Chief investment officer, Okayama Metal and Machinery Pension Fund, Japan
As the chief investment officer for one of Japan’s smaller pension funds, Yoshisuke Kiguchi has one factor particularly in his favour: ever since moving there from an 11-year career at Russell Investments in January 2009, he has ensured the pension fund enjoyed positive annual returns, despite some difficult years.
“Every fiscal year they have accumulated substantial returns despite having to pay annuities to employees and beneficiaries, which is tough for mature pension funds,” said an investment consultant working in Tokyo.
“That’s down to Kiguchi-san; he’s done a very good job dividing investments into different investment horizons, instead of focusing on asset classes.”
The pension executive installed an investment structure based on investment horizons, and heavily focusing on alternative investments. Fund managers say that Kiguchi has three main buckets. First are short-term investments with a three-to-five year horizon, into which Kiguchi has invested into assets such as distressed debt single funds, and liquid assets such as passive investments and stocks.
Further out, from five to 10 years he has put money into less liquid assets such as distressed funds and mortgage bonds and private equity funds. And for the very long, 10-year plus investing, Kiguchi has invested into infrastructure and insurance-linked securities.
The pension fund was the first Japanese pension fund to invest into a physically-backed gold exchange-traded fund in 2012 too, during a period of uncertainty. At the time Kiguchi told the Financial Times the move was to escape “sovereign risk”.
Plus, Kiguchi was a relatively early buyer into Japanese equities when it was not popular, raising the fund’s allocation from an underweight to neutral position of around 8% in 2013. He has invested heavily into overseas assets too, mostly in developed countries, to get higher-yielding by not overly risky returns.
Kiguchi’s willingness to stray from mainstream views has ensured the ongoing investment success of Okayama Metal & Machinery’s fund. The CIO, who has a degree in robotics, is an enthusiastic public speaker too, attending global conferences to learn more from other pension fund executives about new investing techniques.