The outgoing chief executive of industry super giant Cbus has cited a focus on sustainable investing, increased exposure to global shares and bringing investment functions in-house as key drivers of the $56 billion fund’s growth.
Cbus CEO David Atkin on Tuesday resigned from the super fund for the construction and building industries after 12 years in the role. On his watch the fund’s assets under management rose from $12 billion to $56 billion.
“There’s opportunity to make money for investors by investing in renewable energy,” he said. “This fund has been putting our money where our mouth is and looking to invest in sustainable opportunities.”
The fund’s active engagement with the companies it invests in on issues of performance and sustainability was also critical, he said. “We have to be active investors. We need to be not passive and not just sitting and accepting whatever the marketplace delivers up to us,” he said. “We need companies to look at long-term profitability, not short term. We need to reward companies that are operating business on long-term viability.”
He cited the fund’s relationship with AGL as an example. AGL last year survived a push by other shareholders for it to reduce its carbon emissions. “We, along with other similar-minded investors, have been talking to AGL about the need for them to take a serious look at the way in which they are thinking about their business, encouraging them to make major investments in the renewable space,” Mr Atkin said.
“There’s more for AGL to do. But they are being very responsive.”
Cbus has been a pioneer in sustainable investing, he said. “We want to invest in companies that understand we are in a changing world and they need to change too.”
“For me, it’s something I’ve always been committed to. You look at Melbourne today and it’s ever more reason to go down this path. What’s the point in saving for retirement if you can’t even live in this world?” Mr Atkin was referring to the smoke haze that blanketed Melbourne on Tuesday.
Cbus’ domestic infrastructure investments include stakes in ports in Melbourne, Brisbane and Sydney’s Port Botany as well as stakes in several airports, including Tullamarine. Mr Atkin has also worked to shift the fund’s focus to global equities, that now make up 20 per cent of total funds under management. “There’s only so much you can invest in domestically,” he said.
About 20 per cent of Cbus’ funds under management are invested internally and over the next two years, Mr Atkin said this will increase to 30 per cent and 50 per cent after that.
“We saved $80 million in investment costs last year, this year it will be $100 million,” he said. “That is money that goes directly into members accounts. I’m really proud of that.”
Source: Thanks smh.com