Mark Rider, Chief Investment Officer of Brighter Super

Mark Rider, Chief Investment Officer of Brighter Super

Brighter Super Keeps it Simple

In Conversation with Mark Rider

In June, Brighter Super transferred the superannuation business of Suncorp into the fund. In this interview, we speak with CIO Mark Rider about how it affects the overall investment strategy.

On 1 June 2023, 130,000 Suncorp Super members and $6.1 billion in funds under management (FUM) joined Brighter Super, itself the product of the 2021 merger between Energy Super and LGIAsuper.

This latest acquisition has created a superannuation fund with nearly $30 billion in FUM.

Having completed two successor fund transfers in just two years, the fund has seen substantial changes, including the arrival of a new Chief Investment Officer (CIO).

Mark Rider joined the fund as CIO in February 2022 from ChristianSuper and he has been working hard to build a new investment team and create synergies from Brighter Super’s larger scale.

“With the Suncorp Super acquisition, we’ve got around $6 billion of liquidity coming in. And as we fully integrate the portfolios, we’ll be looking to use that liquidity to invest in the opportunities as they present themselves,” Rider says in an interview with [i3] Insights.

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With the Suncorp Super acquisition, we've got around $6 billion of liquidity coming in. And as we fully integrate the portfolios, we'll be looking to use that liquidity to invest in the opportunities as they present themselves

“We’ve done a lot of portfolio integration, but there are still further investment opportunities to come about as we start to move the portfolio towards the way the Brighter Super portfolios have been invested.”

As a retail fund, Suncorp’s portfolios were more skewed towards listed assets. Brighter Super has its origins in the industry fund sector, which typically has higher allocations to unlisted assets and so there is opportunity for diversification.

“With this additional liquidity coming into the fund, given what may lie ahead, it creates opportunities across credit, infrastructure and private equity to position the portfolio in these assets for the years ahead,” Rider says.

“As the next phase, we are looking to get more unlisted exposure.”

The investment team currently stands at 12 people, but only about half of the team came from the preceding funds. This gave Rider the opportunity to build the team culture from the ground up.

“We had three from Energy Super and LGIA and two from Suncorp Super, so the majority of the team actually have come into the business following the merger,” he says.

“From an investment perspective, the portfolios have more of an Energy Super feel to them. But the culture has been very much one where we’ve forged our own. We’ve brought together people from different places and just worked to build that team into one which works collaboratively across the organisation.”

One of the key initiatives Rider and his team undertook was to simplify the MySuper offering and moved the equities to a passive allocation.

“Post the LGIA/Energy Super merger, we have brought the MySuper product probably more in line with the original objective. We made it simpler and lower cost. But we’ve still got significant active [management] in the Choice products,” he says.

Brighter Super also has relatively little private equity exposure in its MySuper option, which helped the fund perform well last year.

“The bulk of the private equity allocation is in the Choice products. We’re going to continue to invest in private equity, but it may well be in the Choice products,” Rider says.

Whether the team will increase its allocation to private equity in its MySuper option is still under discussion. “It’ll be just one of those decisions we consider as we move through the year,” Rider says.

These measures and other synergies created through the merger have resulted in a significant reduction in fees for members. Rider says LGIAsuper and Energy Super members have experienced up to a 29 per cent reduction in fees compared to the period before 2021.

“The synergies certainly are there in terms of the reduction we’ve seen coming through in the cost to members. And that’s what it’s all about. It’s about building a sustainable superannuation fund,” he says.

Investment Approach

Rider has a background rooted in economics, having spent the first 10 years of his career at the Reserve Bank of Australia. As such, his investment approach pays close attention to macro drivers shaping the economy and places emphasis on asset allocation to drive long-term returns.

“You’ve got to build the portfolio up from the individual stocks and securities, but ultimately it’s how it all comes together,” he says.

“Everything we’re putting in the portfolio, what part is it playing? And when we look at it as a whole, how is the portfolio going to behave in different environments?“

The key focus for the team is on how the portfolio performs through the cycle, not just at certain points.

“We don’t know if there’s a recession ahead or whether there’s going to be much higher rates or inflation, but what we can try and do is build a portfolio that we believe can continue to perform through whatever gets thrown at it,” Rider says.

What sets Brighter Super’s portfolio apart from its peers is a relatively high weighting to equities and a low weighting to private equity. These two decisions helped the fund produce a healthy investment return of more than 10 per cent for its MySuper offering in the 12 months to 31 June 2023.

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Compared to our peers, particularly some of the larger ones, we have more of a preference for equities, and particularly Australian equities. That has just been a strategic decision

“Compared to our peers, particularly some of the larger ones, we have more of a preference for equities, and particularly Australian equities. That has just been a strategic decision,” Rider says.

“Our focus in equities is to build a portfolio where we don’t have big style biases. If anything, there might be a bit of a quality bias. And that has served us well through the ups and the downs: to have good managers and being relatively style neutral in that equity area.”

Infrastructure and credit are two of the largest alpha drivers in the portfolio, but he says all of the portfolio’s asset classes have performed relatively well, even private equity.

“We haven’t been in venture capital and we haven’t been into more growth types of private equity. We had small, mid-market buyouts and it was positive for the year as a whole,” he says.

At almost $30 billion, Brighter Super is a solid mid-sized fund and inevitably the question of internalisation of asset management functions comes up. But Rider says Brighter Super is not considering internalisation and doubts whether it will be on the cards even when the fund grows larger.

“The mega-funds are internalising a lot of their operations, having teams overseas, but that’s not the sort of future that we’re envisaging for the fund. We’re not looking to internalise, we’re looking to continue to use external fund managers,” he says.


[i3] Insights is the official educational bulletin of the Investment Innovation Institute [i3]. It covers major trends and innovations in institutional investing, providing independent and thought-provoking content about pension funds, insurance companies and sovereign wealth funds across the globe.