Superannuation is a huge area and we don't know it. 9% of our salary is contributed by our employers on our behalf. You might not realise it, but your sitting on a huge nest egg. And its only going to grow. One ex-investment banker who owns a super fund, salivated as he told me, "its an area of legislated growth". It just has to keep growing because the government forces employers to contribute.
As the workforce grows and more people enter the workforce, superannuation fund are only going to grow. Due to people wishing to maintain their standard of living, they will voluntary sacrifice a proportion of their wages into superannuation. With an aging population, there will be increasing pressure on retirees to fund their own retirement and to rely less on government pensions.
The current status
The influx of money into Super means that these fund managers are sitting on millions if not billions of dollars. It just crazy the amount of money in Super at the moment. Funds under management are at all time high and will only exponentially increase. The entire Australian Super industry is estimated to be $700 AUD billion. That's a pretty big piggy bank.
And that's not even counting American, European, Asian Superfunds (well i dont think they have super in places like China). The famous Californian State Super Fund for government employees called CalPERS is phenemonal in size. At time of writing, it holds $210 US billion worth of stocks, bonds, and private equity. Even Australia has The Future Fund, for Australian government employee which currently has an accumulation of $90 billion in funds.
Bling Bling Baby $$$
The thing is, these Super fund managers have to stash their money somewhere.
You can't sit on $90 billion dollars - ask David Murray, head of the Future Fund. As I've stated in the past, to make money you have to make it work. Many Super Funds are run by professional fund managers and have benchmarks to beat, usually set to the overrall stock market movement. As a friend of mine who helps to construct superfund portfolios states, 'We just have to beat the stockmarket - by 2% or whatever".
At the end of the day, do we really know where our Super money goes? Of course not. You know which fund you put it in, but that money usually is invested into other funds. Which probably end up in a fund of funds (a much bigger fund), and then eventually is re-invested into stocks, bonds, property, etc...
The amount of money involved presents many opportunties. For fund managers, there is more money to play with. More money, means more transactions. More work for the investment professionals, for the lawyers that advise on the deals. For the tax and accounting people to provide their opinions. This vast accumulation of capital means some funds will try to grow even bigger in size (i.e. gain economies of scale) by merging, acquiring, perhaps even divesting.
Overall, this means that markets will be flush with money moving from once place to another, resulting in greater investment and transactional activity , and in turn cause greater risks to be taken by Superfunds as they venture outside their traditional investment boundaries.
The Rise of the Super Fund
Because of the amount of money involved, super funds are probably no longer going to be passive investors. They are big enough to directly invest - to buy and hold large chunks of public company shareholdings, buy significant stakes in property, be more involved in sophisticated investment deals. They are already big players in the marketplace, but only just got bigger.
We've seen the rise of the hedge fund in the 90's.
Are we now witnessing the rise of the Super fund?
I'm out like your 9%,
DJ Ho.
3 comments:
Nothing to do with your entry but thought you may want to comment on this article. and yes it was i who complained about your speorts entries! i diodn't realise i hit anon. i have no shame in admitting that it bores me!
Blogging on the job
Email Print Normal font Large font Kate Hilpern
May 31, 2006 - 2:58PM
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AdvertisementIt was Bridget Jones's Diary that did it. Jennifer Grey, a thirtysomething singleton from England with a gift for comical penmanship, was inspired and started writing her own internet diary, or blog.
But the last laugh was on her.
Grey (not her real name) soon realised that if she didn't stop, it would only be a matter of time before her boss who was referred to in a less than savoury way in the blogosphere found out. "I felt there was a very real chance I'd lose my job, and it was a risk I couldn't take," she says.
Bloggers have learned this lesson the hard way. Recently a lawsuit was brought against a former United States Senate aide whose explicit short-lived blog about relations with Washington officials titillated Beltway political hounds a couple of years ago. Jessica Cutler is being sued for invasion of privacy by a former legal counsel to an Ohio Republican senator.
She was sacked in 2004, once her diary had featured on a popular Washington gossip blog. Other workers in the US have lost their jobs because of blogs.
Delta Airlines gave the boot to flight attendant Ellen Simonetti better known as the Queen of the Sky for posting "inappropriate" pictures of herself in her uniform on her blog. At Google, a young programmer started blogging just a few days into his new job, griping that the internet giant's health plan was less than generous and that the free food on offer was merely an enticement to work past dinner time.
In Britain, employers are responding in a similar way. Probably the best-known example is the bookshop chain Waterstones.
Last year Joe Gordon was dismissed for describing his employers as "Bastardones" and his manager as "Evil Boss".
But far from quashing people's desire to log details of their everyday lives, including work, over the web, it appears to be having the opposite effect. There are almost 30 million blogs, according to blogging website technorati.com, and about 70,000 more appear every day. Unlike Grey, people are throwing caution to the wind and spilling all sorts of beans about their social and work lives.
Some are attracted to the influence blogs wield. Once, if people wanted to say something to a national or global audience, they would have to use publications such as this, and even then the decision of whether to use these sources was down to the journalist or editor. Now they can blog.
In fact, Mark Rogers, the chief executive of blog-monitoring firm Market Sentinel, says it's because blogs are so unlike the conventional media that they've become so popular.
"You can share stuff about everyday lives that you don't get to do in the media and, also, blogs are not static but constantly updated," he says. "There's also the fact that you can respond to many blogs, which creates a kind of forum."
Jeff Jarvis, a media consultant and avid blogger, recently reported a further reason for their appeal: "In this age, when every message is manufactured, metered, spun and filtered, that is precisely what makes blogs so refreshing: their humanity."
Employers tend to be less positive about blogging. Many are concerned about employees revealing confidential information, while others are worried about people saying inappropriate things about their co-workers or bosses.
"Employee bloggers sometimes shoot from the hip, especially because of the informal nature of blogging," says Ben Wilmott at Britain's Chartered Institute of Personnel and Development.
"You could even get employees making racist or sexist comments about their workplace in their blog, and that doesn't look good for the employer."
The reality is that a huge number of blogs aren't read, even by keenest fans. Some are boring, others are just silly. But it only takes one negative reference to an organisation to appear on a search listing, and within hours it could appear higher up than its official website on the results of internet search engines such as Google.
Some companies have the added concern that employees are too busy typing their latest blog entry to get on with their job.
Many organisations are responding by banning staff from blogging, or at least mentioning the employer's name or any identifying details in their blogs. But Wilmott believes this could be counterproductive.
"I think there is a balance employers have to tread between respecting employee freedoms and privacy, and protecting the interests of the business," he says. "If employers go too far down the line of Big Brother, we know from research that employees are less likely to feel positively about a company."
He suggests a company blogging policy should solve any potential problems. IBM is among those that has a blogging code of conduct. "If you publish a blog, use a disclaimer," is one of the computing firm's 10 guidelines.
But some bloggers object to what they believe are less than fair policies. What's more, as one blogger says of Britain's Metropolitan Police's policy, it can be completely futile if you deliberately choose as many bloggers do to remain anonymous.
"Attempting to issue guidelines on the matter is akin to a raging bull in a china shop," she says.
Microsoft takes the opposite stance. It encourages its staff to blog, not least because many of the blogs promote company products. For example, Darren Strange, who's responsible for the next version of Microsoft Office, uses his blog to keep people up to date on the latest developments.
Like many people in the "tech" world and increasingly in other sectors he uses his blog purely in a work capacity.
Other organisations are also recognising that blogs aren't necessarily bad news and can even be turned into an opportunity.
Cadbury-Schweppes encourages its new graduate employees to blog about their experiences of work to act as a recruitment tool.
"While we have a really strong brand, most people don't know what's involved in our everyday jobs," says Gill McCall, an HR graduate who joined the firm last year.
Even bosses are getting in on the act, with some having set up internal blogs as an extension of their intranet. Steve Cody is the CEO of communications firm Peppercom. He says his blog entries attract comment from staff in his company's American and European offices, thereby helping to create a sense of community.
"I think blogging is a beautiful way to break down any perceived barriers between the corner office and the daily employees," he says.
"We have plenty of people blogging personally, too, which I'm not remotely concerned about. If you treat your staff well, there's no reason to think they'll say bad things about you."
woah that's a long comment Sheens! I never realised the comment box could fit so much text. and yes i figured out it was you - who else would explain about the high quality reporting of sport?
That article is really interesting. I've come across similar ones before. I agree with the comments regarding being careful what you say about your employer and your work. In fact I've been very careful about mentioning anything specific about work and only go into general details. It is a fine line between freedom of speech and respecting your position as an employee. And of course, I've got better things to talk about than work like sport!
To me, the most interesting thing were the companies that encourage blogs and the CEO's that write blogs themselves. They have recognised that it is a powerful medium.
But we have to be careful, because what makes blogs unique in era of mass media is their human touch as correctly stated in the article.
Blogs touch our lives in a way that newspapers, magazines, and other forms of communication can't, simply because it makes a connection with us because the writing is unfiltered, it is raw, there's no spin, they are written by ordinary people like me and you.
With company blogs and encouraging employees to write, you kind of wonder if they'll be independent, free from the commerical spin.
There you go, i did write about it!
boy comment and a half or what? a simple url would suffice (though I read the damn thing ;)
DJ your take on super funds presents a big investment front. where exactly does all that dough go? 210 billy for the state of cali alone? incredible. I not investment savvy so where is a good place to start?
as for blogging and all. there are crafty ways (obvious and not so ...) to bump up your ratings (apart from slagging off your boss). but should anyone really care about readership? after all a blog is a diary right?
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