HESTA is Australia’s retirement savings fund for people in the health and community services industry sectors. Data is central to the running of the superannuation fund on behalf of its members. The 2019/20 HESTA annual report includes a section that highlights the importance of timely investment information to support its investment management process.
With 870,000 members across 90,000 employers, and with $52bn funds under management, the smooth and successful running of HESTA depends on the availability of investment information to all business functions. This is summed up in the annual report:
“We partner with leading Enterprise Data Management software vendor, GoldenSource, on the Investment Execution program to deliver a best-in-class data infrastructure that supports our changing requirements. HESTA and GoldenSource have put in place a centralised data infrastructure that has improved data quality, automation and availability of investment information to all business functions including our internal investment team. As HESTA grows, GoldenSource will provide a scalable, integrated infrastructure to manage all future data requirements and provide timely, accurate data into the investment management process, allowing us to make decisions with the best possible data.”
Source: HESTA Annual Report 2019/20
Investment information for all asset classes
HESTA manages some funds in-house and the rest is managed by 95 external fund managers across cash, global debt, property, international shares, Australian shares, infrastructure, private equity, alternatives, currency management and risk management strategies. The investment information required to manage the managers and support HESTA’s investment execution program across multiple asset classes involves investment data from a wide variety of sources and suppliers. These include custodians, researchers, consultants and vendors of market and reference data.
As HESTA’s investment execution program evolves, so too will the sources of data to support it. It’s the strategic nature of the investment execution program and the critical requirement for a flexible and scalable data infrastructure that warrants a mention in the annual report. Investment information is central to the success of an asset owner such as HESTA, and best-in-class data management is required to curate and drive investment information throughout all business functions.
Taking a long term, sustainable view
HESTA not only plans for the long term with technology and investment information because it’s a pension provider, for which consistent performance and stability are key, but also because its values include ‘…making a better world for our members to live, work and retire into’. With a responsibility to its members, the wider health and community services sectors and the environment, investment decisions made through the internal investment team or external fund managers need to be based on complete and reliable investment information. Or, as the report says, ‘…with the best possible data.’
At HESTA, the investment execution program and all aspects of the business are guided by sustainability: ‘HESTA shares the global ambitions for the advancement of the 17 United Nations Sustainable Development Goals (SDGs).’
HESTA has ‘…also become the first major super fund to make a commitment to cut carbon across the portfolio by 33% by 2030 and to net zero by 2050 as a part of our Climate Change Transition Plan (CCTP).’ By way of example, it’s this kind of initiative that can rapidly generate the need for additional data types from new data sources. In this case it might be to support investment information for the rating or scoring of entities as part of environmental, social and governance (ESG) investing.
“Our approach to impact through responsible investment practices is guided by the United Nations-backed Principles for Responsible Investment (PRI). The PRI requires signatories to incorporate environmental, social and governance (ESG) issues into investment analysis and decision-making and practise active ownership of the companies in which we invest.”
Source: HESTA Annual Report 2019/20
Investment information for strong results
For HESTA to be able to report that the year ending June 2020, ‘…has seen a strong result in the face of a volatile market’, means that investment information has been managed and used with discipline. In addition to that, strong partnerships, healthy relationships and shared values seem to be key elements in successfully managing through COVID-19.