July 7, 2009
IT’S NOT every superannuation fund chief executive who can persuade Al Gore to come to Australia to launch a plan to move the nation to clean energy.
Bob Welsh, head of the $6 billion Vicsuper fund, can – partly because he is one of the biggest local investors in Generation Investment Management, the London-based fund manager that Mr Gore chairs.
At a business breakfast in Melbourne next Monday Mr Gore will launch Safe Climate Australia, a non-profit, non-partisan organisation working on Australia’s move to a zero-carbon economy.
The organisation was inspired by Mr Gore’s “Repower America” plan to transform the US economy in 10 years.
Vicsuper, which has more than 247,000 members, is hosting the launch and has previously backed other programs set up by the Safe Climate chief executive, Brendan Condon.
Mr Welsh, who has headed the former public sector fund since it was set up in 1994, has been a “green super” pioneer. His aim is to make Vicsuper, truly sustainable, and he has been prepared to break a few rules to get there.
Vicsuper has made sustainable investment an integral part of its strategy instead of an option available to members who choose it, as most super funds do.
It now has about $1.4 billion in a range of sustainable investment strategies, including $580 million in listed domestic and international share funds, $92 million in forestry and $250 million in its Future Farming Landscapes program, which is buying up rural land and water in northern Victoria. Another $122 million is committed to sustainable private equity.
Mr Welsh has been prepared to sideline the actuaries who advised, for example, that such venture capital investments were “risky” and had “no track record”.
In late 2007 Vicsuper seeded the Cleantech Australia Fund – which invests in Australian start-ups such as the wave-energy converter Oceanlinx – with $30 million.
“That was really satisfying,” Mr Welsh said. “Because the asset consultants said, ‘Look, this is a first-time approach; we don’t know whether the investment case makes sense’.”
Vicsuper is unusual in another way: it does not provide its performance figures to independent ratings agencies such as Super Ratings, although the figures are available on its website.
“We think it’s important to get people to focus on the long term,” Mr Welsh said. “It is impossible to compare returns unless you have exactly the same weighted cash flows and asset allocation. The league tables can be misleading. We don’t think it adds value.”
Vicsuper has a total of $135 million invested with Generation Investment Management. The fund manager does not discuss its performance figures either, but Mr Welsh said it had been “shooting the lights out” – finance-speak for caning it.