Opinion
Kristian Fok: Only a tiny handful of hedge funds justify their fees
“The fees are so high relative to the returns. You know, I do feel that there's only a very small handful. I believe that really earn those. It's very easy for everyone else to come up and have the same fee scale and not really deliver that value.”
Insight
Fok: Internal data systems enable better portfolio decisions than external consultants
“We introduced MSCI Barrow as a risk system that we Incrementally added new data information platforms. We sort of argue that on the basis that it gives us better insights around our own portfolio, which gives us a greater capacity to make informed decisions, f…”
Insight
Fok: Internal management breakeven versus external fund managers is $400M to $500M
“Because no matter what, particularly if it's market driven, you pay them more, right? In our case, we have a relatively fixed cost, and if we double the mandate, then we're not paying that much more. So for us, you know, breakeven relative to a fund manager wa…”
Opinion
Kristian Fok: The private equity fund-of-funds model does not work for CBUS
“So, we have a fund to funds program that was entered into a long time ago, and frankly, that just doesn't work for us.”
Disclosure
CBUS plans concentrated direct stakes and corporate debt financing in Australian equities
“So one of our strategies that we're likely to introduce this year is to actually take more concentrated individual positions in some Australian listed companies with a view to not only just have those positions as an equity holder, but to look at whether we ca…”
Assertion Supported
Fok: The asset management industry sustains an astounding 40% profit margin
“I think the industry itself, I mean, it just astounds me that asset management industry can make 40% margin on their revenue. I mean, there's not many industries that sustain that.”
Disclosure
CBUS operates an in-house, end-to-end property development company
“So we, I think, fairly unique, certainly in Australia, and probably globally, where we have a dedicated property development company that purchases land, gets the design of a building, gets all the pre-lease tenants, builds a building, and then we hold it.”
Assertion Not publicly verifiable
CBUS's direct property development business averaged over 20% returns for five years
“The last, so the last five years, it's earned on average over 20% per annum, which is just astounding.”
Opinion
Fok: Large infrastructure managers leave mid-size and greenfield projects unaddressed
“So within infrastructure, for instance, we already have a number of managers that are high quality of global reach, but they're very big. So, they can give us access to the really large deals, and in some cases, I'll source them, and we might actually invest a…”
Insight
Fok: Institutional asset silos force funds to pay banks to unbundle deals
“Quite often what you do is you pay an investment bank to actually take those opportunities and to structure it and split it out. And then you go ahead and you buy the individual pieces and put it back together again. But the flip side is unless you've got an i…”
Disclosure
CBUS replaced its static long-term model with a cyclical reference portfolio
“We used to have a long-term portfolio, but it was sort of like so long that it didn't capture medium-term trends. So now we have a reference portfolio, and it's designed to take into account particular sort of aspect of the cycle.”
Disclosure
Fok: CBUS targets 35% to 40% internal management within four years
“So in the next four months, and that should bring our internal management up to about 20%. We think ultimately over the next three to four years, it'll probably go up to 35 or 40%.”
Insight
CBUS focuses on domestic property development to avoid product-constrained overseas markets
“Property at the moment Is almost all domestic. It's unusual that that's the case because we just have this advantage that we can create products, whereas most pension funds here, the products constrained, so they have to go overseas.”
Insight
Fok: Accumulation and account-based funds do not require actuaries
“Ultimately you don't really need an actuary to run an accumulation or an account-based fund.”
Assertion Supported
Australian super funds require a two-thirds majority between employers and unions
“So you got to remember that these funds are comprised of both employers and unions, right? And they need two thirds agreement to make anything happen.”
Assertion Not checkable as stated
Fok: CBUS saved A$15 million annually by renegotiating external manager fees
“The combination of going in and reducing fees without having to sort of materially change the strategy, plus adding the platform to In terms of information and so forth, allowed us, each time we went back to the board, we said, look, returns are still strong. …”
Assertion Supported
Fok: Approximately 100 Australian equity managers compete in an oversupplied market
“In the Australian market, there's like a hundred people trying to sell Aussie equities.”
Assertion Supported
CBUS Property's direct investments created 70,000 Australian construction jobs over eight years
“CBUS Property not only has generated those returns, but in the last, I think, eight years, it's created 70,000 jobs in our own industry, which is a really interesting, it's this virtuous circle because we take our members' superannuation money and then a porti…”
Disclosure
Fok: Approximately 40% of CBUS's total portfolio is invested domestically
“So I think generally speaking, it'd be probably about 40% of the portfolio is still domestically focused.”
