Disclosure
Hostplus allocates 0% to fixed income, opting for unlisted assets instead
“53% of our strategic asset allocation is public equities, listed equities. It's a combination of domestic equities and international equities developed markets and international equities emerging markets. 53% in total. The other 47% is unlisted infrastructure,…”
Disclosure
Hostplus demands intrusive personal financial details from prospective fund managers
“How much money do you earn? How many kids do you have? What schools do they go to? What are the school fees like? At what stage are you at? What car do you drive? Is it mortgaged? There's a whole set of, you have a right not to answer those questions, but you'…”
Insight
Traditional pension models are mathematically broken by multi-decade retirement lifespans
“The real issue is that pension funds were designed at times when people retired at age 65 and conveniently died at age 68.
Today, people retire at 65 or 70 and live to a 108.
How are you going to survive 30 or 40 years not working, not generating an income, li…”
Insight
Hostplus uses hedge funds as crisis liquidity, not for volatility protection
“So we view hedge funds playing that role rather than protecting the portfolio from The volatility of equity markets. Our unlisted assets have that role.”
Insight
Institutional LPs hold the power to end two-and-twenty fee structures
“Institutional investors are the market. You're charging yourself, right? Who is going to change that? Who is going to take action to finally put an end to two and 20? Well, where is the power? Without your allocation, they can't generate a fee. I'm just asking…”
Insight
Sicilia: Human element and assumptions outweigh pure quantitative data in finance
“The tools were just that. But the human element in finance and that the assumptions that you need to make swamp any of the other benefits that the data provided at the time.”
Prediction Not checkable as stated
Sicilia: Australia's Super Retirement Age Will Likely Reach 70
“In a system that you cannot take your money out of the system unless you reach retirement age, which is currently 65, but more likely going to be 70 by the time they get there.”
Insight
Sicilia: Unlisted asset stability stems from cash flows, not just valuation lag
“Our downside protection comes from unlisted assets. The volatility of the equity markets is dampened By the existence of unlisted assets in varying degrees, and that's not just a valuation lag. It's also to do with the quality of the cash flows that you get fr…”
Insight
Sicilia: Pension fund ownership prevents predatory wealth extraction from infrastructure
“So the concept of super normal extraction of wealth and abhorrent returns just isn't going to happen if you have pension fund owners. It's unnecessary.”
Insight
Sicilia: Allocators should resist deploying capital into 6% infrastructure returns
“So the temptation to invest in infrastructure assets that are generating six percent returns, therefore diluting your portfolio return,
Is huge.
But you should resist that temptation.
That is not a good idea to go down that path.
It's better to find some other…”
Disclosure
Sicilia: Hostplus invests in specific individuals rather than brand-name asset managers
“In fact, if you look at Host Plus's website, you won't see too many brand names across any asset class, because we don't invest in brands We invest in individuals.”
Insight
Sicilia: Performance should never be the reason to exit an investment
“If you know why you make an investment, then you have a ready-made reason to get out of it if that reason changes. Performance is never one of them.”
Insight
Sicilia: Relationships drive 95% of private equity investing success
“And in some asset classes, like private equity in general, or private markets, but private equity in particular, without a relationship, we won't do the investment. Relationships are 95% of the driving force. People underestimate how important relationships ar…”
Insight
Sicilia: Boutique, hungry investment managers bearing business risk outperform
“Boutique is better. Hungry is better. Having a business risk is better.”
Opinion
Sicilia: Asset management fees should plateau rather than increase linearly
“How do you justify the fact that if you're managing a bond portfolio or an equities portfolio and you're trading, that the fee goes up in a linear way, more or less, if I give you five hundred million or a billion or three billion? Surely it should plateau At …”
Disclosure
Hostplus outsources all $42B in asset management with 18 investment staff
“The investment staff is currently 18 people, but we do not manage any money in-house. At this point in time, we prefer to outsource all money management”
Assertion Not publicly verifiable
Sicilia: Hostplus placed top-quartile in 16 of past 20 years
“So over the last 20 financial years, Host Plus has been top quartile in 16 of them.”
Insight
Sicilia views fee savings from fund-owned vehicles as a riskless return
“When you own those vehicles, and as I said, 20 or so industry funds own those vehicles. You can get preferential fees, and you can deliver the fee saving directly to your members as a riskless return.”
Assertion Supported
Sicilia: Hostplus committed $1.2B to VC, largest among Australian super funds
“Including Hostplus putting 1.2 billion dollars into venture capital, which makes Hostplus the biggest Australian institutional investor super fund in venture capital by a long shot”
Disclosure
Hostplus board makes all investment decisions, acting as a jury
“The board makes all investment decisions. Our job is to work with Jana, our asset consultant. And prepare the case, if you like. Think of the board like a jury.”
Disclosure
Hostplus uses a 4-director subcommittee for agile co-investment approvals
“Internally, the board has formed a small subcommittee of four directors, which we call the SIG, the Special Investment Group, and they can be called on demand
On a deal by deal basis.
And they can get together and work with the internal team and have a delegat…”
Assertion Supported
Sicilia: Hostplus Serves 1.2M Members with Average Age of 34
“We have a 180,000 contributing employers and 1.2 million members.
Average age, 34.”
Assertion Supported
Sicilia: Hospitality and Retail Funds Capture Half of First-Time Workers
“About half of the first time job entrance belong to those two funds, and every other super fund in the country gets the other half.”
Disclosure
Sicilia: Hostplus return target is inflation plus 4% over 20 years
“So for Host Plus, our return objectives are inflation plus four percent per annum over 20 year periods.”
