Global financial services technology provider GBST (ASX:GBT) and major industry super fund, the Australian Government Employees Superannuation Trust (AGEST), today announced a new agreement for GBST to provide after-tax benchmarking and performance measurement services for six of AGEST’s Australian Equities mandates.
The new agreement follows a decision by AGEST’s investment committee to alter the performance objective of its Australian Equities mandates to an after-tax basis from 1 January 2012. To enable this, GBST will provide after-tax index benchmarks, and for two of AGEST’s managers it will also calculate after-tax portfolio performance.
“Measuring a fund manager’s performance on an after-tax basis is an important step in encouraging the manager to make investment decisions that maximise after-tax, rather than pretax, performance. This is consistent with AGEST’s focus on improving net benefits to its members,” said Cath Bowtell, AGEST CEO. “GBST was able to provide a tailored and well priced solution to achieve this goal.”
As well as being a major provider of operational technology to the broking and wealth management industries, GBST provides customised after-tax services through the GBST Quant division. GBST has seen increasing interest in these services from the superannuation industry, with GBST calculating a variety of after-tax indices and providing associated services for many leading superannuation funds and fund managers including UniSuper and Warakirri Asset Management.
GBST’s customised benchmarks range from slight variations to standard industry indices through to completely customised calculations. Calculations can be tailored to reflect factors such as franking credits, capital gains tax impacts, and the effect of off-market share buy-backs.
“Given the importance of the sector, both to the economy and Australians relying on a healthy nest egg in retirement, it’s positive to see the superannuation industry moving towards higher levels of accountability and transparency and concentrating on after-tax returns which are the most relevant to the super fund members,” said Kathy Taylor-Hofmann, Head of GBST Quant division.
“After-tax benchmarking enables portfolio managers to actively assess and manage the tax implications of transactions in their portfolio at a given time, and allows a super fund to compare fund manager performance on an after-tax basis.”
GBST today also revealed it would be launching a new solution to market this year – the GBST Tax Analyser, which will be the first solution in Australia allowing fund managers to see and manage super fund level tax consequences of proposed actions.
“Competition for the huge fund flows in the superannuation sector is stiff. Superannuation providers who can show they are more accountable, more focused on the same return objectives as their members, will be at an advantage in attracting members,” concluded Mrs Taylor-Hofmann.