State Super acquires 23pc of Frontier Advisors in a ‘bold collaboration’ seen as an industry first

Superannuation fund State Super has acquired a 23 per cent equity stake in Melbourne-based advisory and research firm Frontier Advisors in a strategic move that the company says will deliver an industry first.

As part of the agreement, State Super will relocate its dedicated investment team within Frontier to create a new independent chief investment officer – an ICIO service - to support members.

Frontier describes the agreement as “a bold collaboration” with long-term client SAS Trustee Corporation, which is trustee of State Super.

The company says the ICIO service is distinct from both the traditional outsourced chief investment officer and implemented consulting services currently found in the market.

“Our ICIO service is advice led, not product driven, and will support investors with their portfolio management, operational, risk management, administration, custody and reporting requirements, while retaining our unconflicted adviser status,” says the company.

Financial details of the acquisition have not been disclosed, but State Super will secure a board position at Frontier which the fund says aligns the NSW public sector superannuation fund with other major shareholders, namely AustralianSuper, Hesta, Cbus and First Super.

State Super CEO John Livanas says the collaboration between State Super and Frontier will provide members with continuity and security by retaining access to the technical skills of the specialist team already managing their funds.

“We have a great team of professionals managing our portfolio, and as State Super enters into a new transition phase, we’ve devised a solution to retain this valuable investment team so members who’ve entrusted their retirement savings to us receive a continuity of service,” says Livanas.

State Street describes the terms of the acquisition as an “inventive solution” that will deliver greater opportunity for career growth and professional development for State Super’s investment team.

“For the fund, it will be a seamless transition with our innovative solution that enables current advisers and investors to remain operating exactly as they have for over a decade, whilst providing staff a wealth of new opportunities,” says Livanas.

“Our members report a high level of satisfaction and we are pleased that we can secure this proven capability for State Super and our members into the future.”

State Super is one of Australia's largest superannuation funds with $38 billion in assets under management for about 80,000 members.

Frontier Advisors, which was established in 1994 and has $850 billion in funds under advice, is a leading independent investment advisory businesses in the sector.

“This arrangement ensures that State Super’s decumulation investment expertise remains unconflicted and continues to serve the best interests of its members,” says Frontier CEO Andrew Polson.

“Frontier now has added capability and can provide investors with the benefit of retaining control over their own investment policy, strategy and portfolio construction while accessing institutional grade end to end investment services and to maintain our unconflicted advice model in the process.”