Spaceship is shaking up super one astronaut at a time

Paul Bennetts is co-founder of super fund Spaceship: the “young person’s fund” that has high-profile investors.

The five most valuable companies in the world are all technology firms, says Paul Bennetts. Picture: Hollie Adams

Paul Bennetts is the co-founder of superannuation fund Spaceship: the “young person’s super fund” that has attracted a string of high-profile investors including Atlassian’s Mike Cannon-Brookes and Paypal co-founder Peter Thiel.

The fund has faced criticism over its range of investments and relatively high fees. But Bennetts’s marketing nous — investors are referred to as ­“astronauts” and social media is a key distribution channel — led to an impressive 12,000 people ­signing up in its first weeks of ­operation.
What is Spaceship doing differently to other super funds out there?
We’re trying to get young people engaged in super, and I think everyone would agree they’re not.

Younger people are always asking me how much they actually have to save for their retirement. We need to highlight that super is not just an investment product.

How did Spaceship lift off?
I was in a venture capital firm called AirTree Ventures. We were very fortunate in raising our second fund early last year, a $250 million fund and the biggest business fund in the county. I was looking at my superannuation at the time and I was really struggling to understand it. And I’m an investment professional (laughs).

I started talking to my very good friend, Kaushik Sen (ex AMP, ANZ), who had been in superannuation for 10 years and I began to see there was an opportunity in this space to help young people with building a superannuation product suited to them. And that’s when Kaushik and I co-founded Spaceship.
So is the essence of Spaceship Super that it puts technology companies at the core?
Our customers are mainly aged 24 to 35 so they’re saving up over a nearly 30-year time horizon. We think: you’re going to invest for a world 30 years from now, so Spaceship should be investing in where the world is going.
But so many tech companies are so volatile: how do you de-risk those assets?
We don’t just invest in tech companies. We believe in a well-diversified portfolio. But we also think portfolios should be overweight tech companies because they tend to be the most differentiated and defensible companies over long-term business trends.

The five most valuable companies in the world are all technology firms, they all have massive cash positions and they all have competitive positions that any other company in any other industry would love to have.

Investors are always looking at businesses over their position in one cycle. In superannuation, you’re investing in a company for many cycles over 30 years. So you’re less at risk with tech companies because the firms with the best competitive advantages are the ones that are going to do well over those 30 years.

What are your own investments?
I’m definitely more of a stocks guy. I’m an investment professional by trade. I’ve been a shareholder in Warren Buffett’s Berkshire Hathaway since 2006.
And do you have any property?
I don’t have any property at the moment. House prices are very, very high. I was close to purchasing a property back in Queensland, but I’m in no rush to make that decision. I’m spending my time concentrating on building my human capital in my career and when I’m ready I’ll take the plunge.
There have been criticisms that Spaceship is too expensive as a super fund — it looks to be charging standard fees though the emphasis is on index investing.
I think some of those criticisms are probably right. We went to market with not much capital behind us and we’ve been very fortunate this year to build a customer base and get more capital behind us. We’re bringing out some new products later this year. You will see fees come down. Watch this space.
Uber is one tech company that’s not doing so well. Magellan’s Hamish Douglass labelled it a “Ponzi scheme”. Do you agree?
Uber’s issue is that it’s gone through an extreme period of growth and there’s been problems within their work culture, which have been well publicised.

As for the comments from Hamish Douglass, the wonderful thing about a stockmarket is you have a buyer and a seller who come together, with completely opposite opinions of each other.

But I think it’s still difficult to judge Uber considering it’s not a public company.
What did you think of the government’s changes to super regarding first-home buyers? How will that affect how Spaceship does things?
I live in Sydney and it’s a really difficult market for the internet generation to crack. I think it’s a good thing when the government tries to help them build wealth.

Young people are saving for their super, it’s compulsory. But outside of that, they’re saving for their house too and they’re asking funds like us, “How do I do it? How do I save enough?” And the next product you see from Spaceship over the next 12 months will be centred on that. We’re going to set out a series of broader savings and investment products.
Will more super funds have to transform into “saving and investment hubs”?
I think different businesses will make the decisions best for them, for some it’s better to go narrow.

For us, we’re learning about our customers and our product road map is based on what they’re asking for.
What was your first big investment?
In my last year of university, I was working in a computer store and I thought, “I can do this myself”. So I opened up my own store and soon had a chain of stores. It was a wonderful experience for a 20-year-old.