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UniSuper selects GBST for after-tax benchmarking solutions

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Published: 26/05/2011

After-tax considerations mean member portfolios could be boosted by up to 2% per year

GBST (ASX:GBT), a global provider of technology services to the financial services industry, has been selected by UniSuper, the industry superfund dedicated to Australia’s higher education and research sector, for the provision of after-tax benchmarking solutions.

Effective from 1 July 2011, the new partnership will see UniSuper’s Australian shares managers have their performance calculated on an after-tax basis with excess returns measured against a GBST-calculated S&P/ASX series of after-tax indices.

According to GBST, understanding the tax implications of investment decisions at the time the decision is made means fund managers can improve the after-tax return on investments. As superannuation fund members accumulate their retirement savings and retire on after-tax returns, this could significantly boost the funds available to them on retirement. According to a submission to the Cooper Super System Review by Gordon Mackenzie of ATAX University of NSW, this could boost member portfolio returns by as much as 2% each year.

UniSuper’s Head of Portfolio Analysis & Implementation, Dharmendra Dayabhai said the fund had been considering an after-tax benchmark and return methodology for some time and the Cooper Review had heightened the issue.

“We recognise the importance of post-tax considerations and assessing after-tax performance means we are further aligning our investment managers to the best interests of our members.

“It was important for us to work with an independent and flexible provider that could implement an after-tax model smoothly and we are confident that GBST are best placed to deliver what we need,” Dayabhai said.

Australian-headquartered GBST has 10 years’ experience in developing quantitative services and tools. Its quantitative data services business, GBST Quant, specialises in investment taxation issues and after-tax analysis. GBST’s experienced team collates data, applies complex methodology and analysis to accurately measure portfolio value and performance.

“We’re seeing increased demand for after-tax solutions from clients and prospects as greater emphasis is placed on superfund transparency and accountability. Our team works closely with clients to ensure the right benchmark is selected so that it best fits their investment processes and is also easily comparable for members to read and interpret,” said Neil Detering, head of GBST Quant.

GBST Quant provides customised benchmark solutions both pre and post tax. The custom benchmarks can range from slight variations to standard industry indices such as the FTSE/ASFA series through to completely custom calculations that leverage GBST’s extensive data set and experience.

“As the industry moves towards after-tax measurement and performance becoming the norm, the next challenge is for fund managers to make tax considerations an integral component of their investment process. We are committed to providing innovative solutions that can support the investment management community with this transition,” Detering concluded.

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