Intense regulatory scrutiny over excessive fees and poor returns has triggered a rapid industry consolidation.

With the Australian Prudential Regulation Authority (APRA) questioning the sustainability of funds with less than USD 30bn, more mergers and more funds exiting the market are expected. In fact, the number of super funds is expected to be slashed by half by 2025. 

With a difficult macro-economic environment and more expectations for transparency and sustainable investing, the superannuation sector is at a crossroads. 

Industry Consolidation

Three imperatives to help super funds successfully scale

With fewer players in the market, you may be looking to scale operations. But what levers can you push to access more operational efficiencies? Here are three points to consider as you forge a strong path forward.

1. Achieve cost-effective scale by simplifying your IT architecture.
2. Make the most-informed decisions with real-time analytics.
3. Leverage global best practices from a technology partner’s experience with a growing community of pension fund clients.

Author: Alan Copping, GTM Senior Strategy Principal, SimCorp

How to achieve operational excellence

Accelerating retirees’ income with a whole of fund view

Another round of turbulence brought by the abrupt end of easy money and the stability of low rates, low volatility and low inflation, is prompting many funds to rethink how they effectively build portfolios and manage risks. 

Superannuation funds are already grappling with increasingly complex portfolio structures (with multiple levels of investments and focus) and datasets, stemming from waves of mergers, new products, multiple siloed systems and incohesive risk management infrastructure.

In a recent global survey, 59% of pension leaders said that inefficient workflows are preventing them from achieving their growth ambitions.

Now imagine having a whole-of-fund view for all asset classes in one platform. Truly all classes - both internally and externally managed, across public and private markets with integrated compliance, risk and performance in one platform. Only with this real-time access to a holistic, accurate view across the entire book of business can you weather volatile market conditions and plan for the unknowns. This complete portfolio view will also provide the foundation to internalize investment functions and scale in the future.  

Learn more about the whole of fund view.

With heavy reliance on custodians, superannuation funds have grown used to delays in reporting and ultimately decision-making. With a delayed version of the truth, they face greater operational risks that impact performance.

Alan Copping,
GTM Senior Strategy Principal, SimCorp

How we help pension funds around the world

We support some of the largest and top-rated pension systems in Europe*, plus several Canadian pension funds - the masters of insourcing. Here are some examples.

With new regulatory requirements looming, PGGM decided to pursue an integrated approach to collateral management and post-trade processing.

See the client story here

As a major investor in alternative investments, ATP saw great value from consolidating their IT platforms from two systems, down to one – and the benefits that came with it. 

See the client story here

Jim Keohane, former President and CEO of the Healthcare of Ontario Pension Plan (HOOPP), makes the case for an advanced investment management solution to drive derivatives processing and power the liability-driven investment model of the leading Canadian pension fund.

See the client story here

The Australian superannuation fund HESTA boosts front office with SimCorp Dimension as a Service. The selection of our multi-asset investment management platform forms an integral role in HESTA’s ambitious investment strategy, delivering the scale needed to sustainably support the growth of its internal and external investments. 

See the client story here

SimCorp for Superannuation funds in times of uncertainty

Why Partner with Us? 

We support 300 clients worldwide including 45 pension funds representing some of the largest and most progressive public pension plans in Europe, North America and Asia Pacific. More than USD 30 trillion in assets is managed on our platform.

One single platform covers the entire investment value chain with full modularity depending on your needs today and tomorrow.

  • Complete transparency and insights on positions at all levels with best-in-class multi-asset exposure monitoring that supports multi-level investing, look-through capabilities and automated cash management
  • Support for internalization with a true multi-asset platform across the entire investment lifecycle with tools for internal portfolio construction and rebalancing for public as well as private markets’ assets, with integrated pre-trade compliance, risk and performance all in one place 
  • An end-to-end approach to data and analytics support with easy access to the same (internally as well as externally sourced) data throughout the investment value chain and seamless integration to the ‘super ecosystem’ of custodians and data providers of your choice
  • Stability of technology partner in terms of ownership, strategy, vision and consistent R&D commitments with 20 years serving the Australian market 
  • Ability to offer complete deployment flexibility—we provide installation on-premise or in the cloud

*according to The Mercer CFA Institute Global Pension Index 

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