Just a week after Future Fund chairman Peter Costello reiterated his ambition to move the organisation into the general superannuation market, the fund’s CEO David Neal has announced he will take over the top job at IFM Investors.
Mr Neal’s 13-year career as chief investment officer and then CEO at the Future Fund will end on February 28.
He will move to IFM where he will complete a transition period with existing CEO Brett Himbury, who was scheduled to depart later this year.
Similar role at both funds
The two organisations are similar operations. The Future Fund manages $168 billion in retirement money for Commonwealth public servants on now-closed defined-benefit schemes, as well as $44 billion for other federal agencies.
IFM Investors is a $163 billion funds manager owned by 27 industry super funds. It invests for a range of mainly not-for-profit pension funds internationally, with a particular focus on global infrastructure and alternative assets.
Mr Neal’s move comes as the government’s retirement incomes review ramps up to deal with public submissions and lobbying by industry and welfare groups.
Costello wants more
Mr Costello, the former Howard-era treasurer who created the Future Fund, first floated the idea of moving the fund into general superannuation several years ago.
Last week he said “if the government wants to set up a default [super] agency we could act as a wholesale funds manager.”
The retirement incomes review could be the platform the government uses to bring that ambition into reality if it finds the super system needs to be broadened.
The review will examine the age pension, superannuation and private savings including home ownership.
David Knox, a partner with superannuation consultancy Mercer, said the review needed to “set a clear objective for the retirement income system as a whole”.
“We need to know what are the objectives of the age pension, compulsory superannuation and voluntary savings,” he said.
His comments come after Superannuation Minister Jane Hume last week said the current system needed a competitive shakeup.
The system “has relied upon complacency and inertia, there is leakage at almost every step of the process,” she said.
“My goal … is to have this ship watertight and steaming ahead toward the best possible retirement outcomes.”
Cabinet views split
Opinions in the Morrison cabinet are said to be split on the Future Fund’s potential move into super.
Some see it as a way of reducing the power of the industry fund movement, which conservative elements in the government consider too close to unions. And others oppose the idea.
Mr Costello said Mr Neal’s departure would be a major blow to the Future Fund.
“David has done a terrific job first as Chief Investment Officer and then as Chief Executive Officer,” Mr Costello said.
“He has been instrumental in designing and implementing an investment strategy that has grown the Future Fund to its current value and in building a robust and effective organisation.”
Meanwhile, IFM Investors chair Greg Combet described the incoming Mr Neal as a “superb leader”.
“I am so pleased we have secured the services of Mr Neal –a superb leader and an investment professional with a highly successful record,” he said.
“David will continue the global evolution of IFM Investors consistent with our purpose – an ambitious agenda going forward – to maintain strong investment performance across our asset classes and products, continue to grow and evolve as an organisation, and to be leaders in responsible investment.
“The industry super funds movement has now clearly reached a scale where we can attract the very best corporate leaders in the world.”
Mr Costello said the Future Fund would conduct a global search to find a replacement for Mr Neale, with risk officer Cameron Price to cover the role until an appointment has been made.
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