15 years and $200bn later, Australian Super’s Ian Silk plots next milestone

Australian Super CEO Ian Silk. Picture: Aaron Francis

The immediate economic outlook is good, according to Australian Super boss Ian Silk who says he has a “degree of optimism” about the market’s future.

General fiscal policy is in good shape, and even with a couple of rate rises, interest rates are still historically low, he says.

But Silk notes that while the short-term outlook is strong thanks to the flood of fiscal support, the test will be in the longer term.

The economy has impressed by returning to 2019 levels but that was a year of tepid growth and Silk says there is a clear need for productivity improvement for sustained growth.

Australian Super celebrates its 15th birthday next week, having increased assets under management by 10 times in that period to $225bn, with another projected doubling in the next five years to $500bn.

At its start, the merger of ARM and STA had combined assets under management of $21 billion with 80 people on staff.

Today it is closer to 1000 people, with a team of 35 heading to 50 in London, one planned for New York and a small office in Beijing.

Chief executive Silk and investment chief Mark Delaney have formed a remarkable team over the distance and neither has any stated plans about leaving any time soon.

If either was to fall under a bus, chief risk officer Paul Schroder and head of mid-risk investments Jason Peasley are seen as two potential internal successors.

AFL tragics Silk and Delaney have had better years with their respective teams Hawthorn and Collingwood towards the bottom of the table, but the fund’s balanced fund is on track to post its best performance on record at 19 per cent over 12 months.

Silk says the two have complementary skills with Delaney, a very good investor running a good team of professionals.

Super Ratings figures for the year ended May show Australian Super ranking No. 1 over 10 and five years and third over three years.

When the fund was created Silk said the aim was “to build a large organisation to extract the benefits of scale to post better returns to members.”

The word on the street at the time was the $21 billion fund was too big and unwieldy but Silk and Delaney worked on the idea that the more money they had the more they could increase capability to improve the brand and in return attract more members.

Plans to double the fund in five years are based on organic returns but with APRA drawing a line in the sand around funds the chances of acquisitions are also high.

Silk says the major challenge is to maintain performance and not fall to hubris.

The fund’s target is to achieve the same performance as international funds Singapore based GIC and Canadian CPPIB, which are both double the size of Australian Super.

Silk says corporate Australia has warmed to the fund in part because it has proved to be a loyal long-term investor with stock turnover half the market average.