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Australian Capital Territory

PRI reporting framework 2017

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Basic Information

OO 01. Signatory category and services

01.1. Select the type that best describes your organisation or the services you provide.

01.2. Additional information. [Optional]

While the legal entity that is represented as a signatory to the Principles for Responsible Investment (PRI) is the Australian Capital Territory, the body politic established by section 7 of the Australian Capital Territory (Self-Government) Act 1988 (Cwlth), the commitments that derive from the ACT Government’s endorsement of the PRI apply to specific financial investment portfolios managed by the Chief Minister, Treasury and Economic Development Directorate (CMTEDD).  The financial investment operations are not performed by a separate legal entity.

The range of responsibilities of CMTEDD is extensive and extends beyond just financial investment operations.  CMTEDD leads the ACT Public Service (ACTPS) and provides strategic advice and support to the Directorate's Ministers and the Cabinet on policy, financial and economic matters, service delivery and whole of government issues. The Directorate facilitates the implementation of government priorities and drives many new initiatives.

The Directorate is responsible for collecting and managing taxation revenue; managing the Government's financial assets and liabilities, including the defined benefit superannuation investment assets and liabilities; and providing advice to the Government and ACT agencies on the Territory's budget and financial management, economic and revenue policy, federal financial relations, and workers compensation policy. The Directorate is also responsible for Shared Services which provides financial, ICT and HR support across Government.

The Directorate focuses on facilitating business development, investment, tourism and events, sport and recreation, arts, and other government activity, often in coordination with the private sector, to increase the economic performance of the ACT. The Directorate is also responsible for land release and facilitating projects through the office of Coordinator-General, as well as Procurement and Capital Works.

It is within this context and the unique position of being an Australian Sovereign entity that the underlying investment activities are conducted with a specifically targeted approach, and in a manner that complies with our legislative and government procedural requirements.


OO 02. Headquarters and operational countries

02.1. Select the location of your organisation’s headquarters.

Australia

02.2. Indicate the number of countries in which you have offices (including your headquarters).

02.3. Indicate the approximate number of staff in your organisation in full-time equivalents (FTE).

6 FTE

02.4. Additional information. [Optional]

Asset Liability Management Branch within CMTEDD has 6 FTE responsible for the management of the ACT Government's financial investment assets, debt liabilities (debt issuance and management) and treasury operations through the establishment of investment and borrowing policies and objectives, the co-ordination and implementation of cash management, investment and borrowing activities.

Asset Liability Management Branch is also responsible for financial and statutory reporting, performance reporting, management reporting and budget development and coordination.

The estimated total of all CMTEDD staff is in excess of 2,400 (FTE's).


OO 03. Subsidiaries that are separate PRI signatories

03.1. Indicate whether you have subsidiaries within your organisation that are also PRI signatories in their own right.

03.3. Additional information. [Optional]


OO 04. Reporting year and AUM

04.1. Indicate the year end date for your reporting year.

30/06/2016

04.2. Indicate your total AUM at the end of your reporting year, excluding subsidiaries you have chosen not to report on.

Total AUM
trillions billions millions thousands hundreds
Currency
Assets in USD
trillions billions millions thousands hundreds

04.4. Additional information. [Optional]

The total AUM reported in Australian dollars represents the total AUM of financial investment assets managed by CMTEDD for the ACT Government at the end of the financial reporting year, 30 June 2016.

There are no subsidiaries, no AUM exclusions or the possibility of duplication.


OO 06. How would you like to disclose your asset class mix

New selection options have been added to this indicator. Please review your prefilled responses carefully.

06.1. How you would like to disclose your asset class mix.

Internally managed (%)
Externally managed (%)

 

Listed equity 0 0 10-50% 41
Fixed income 0 0 10-50% 42
Private equity 0 0 <10% 3
Property 0 0 <10% 7
Infrastructure 0 0 0 0
Commodities 0 0 0 0
Hedge funds 0 0 0 0
Forestry 0 0 0 0
Farmland 0 0 0 0
Inclusive finance 0 0 0 0
Cash 0 0 <10% 7
Other (1), specify 0 0 0 0
Other (2), specify 0 0 0 0

06.2. Publish our asset class mix as per attached image [Optional].

06.3. Provide contextual information on your AUM asset class split. [Optional]

The asset class mix incorporates the combined exposures of all the AUM managed by CMTEDD for the ACT Government.  CMTEDD manages two financial investment asset portfolios on behalf of the ACT Government. 

  • Cash of the general government not required for immediate expenditure is invested domestically with exposure to cash faciliities, short term money market securities and capital market securities, including Commonwealth and State Government debt securities and corporate investment grade debt securities.
  • ACT Government employees are members of a number of different superannuation schemes as arrangements have changed over time.  Approximately one third of current full time employees are members of closed Commonwealth (Australian) Government defined benefit superannuation schemes - the ACT Government does not operate superannuation schemes for employees.  Fully funding the defined benefit superannuation liabilities over time is a key financial objective of the ACT Government.  Investment funds are being set aside to assist the ACT Government in extinguishing these long term defined benefit employer superannuaton liabilities.  The ACT Government reserve fund's investments are invested across a range of asset classes including the Australian cash and money markets, the Australian and international debt capital markets, Australian and international developed market listed equities, private equity and property.

The financial investment portfolios managed by CMTEDD are invested in accordance with an established Investment Plan, Responsible Investment policy, Proxy Voting policy, and Australian Capital Territory legislative requirements.

These financial investment assets are part of the total Australian Capital Territory consolidated balance sheet.  Refer to http://apps.treasury.act.gov.au/__data/assets/pdf_file/0003/991461/2015-16-Consolidated-Annual-Financial-Statements.pdf


OO 07. Fixed income AUM breakdown

07.1. Provide to the nearest 5% the percentage breakdown of your Fixed Income AUM at the end of your reporting year, using the following categories.

Externally managed
45 SSA
25 Corporate (financial)
10 Corporate (non-financial)
20 Securitised
Total 100%

OO 08. Segregated mandates or pooled funds

New selection options have been added to this indicator. Please review your prefilled responses carefully.

08.1. Provide a breakdown of your organisation’s externally managed assets between segregated mandates and pooled funds.

Asset class breakdown
Segregated mandate(s)
Pooled fund(s)
[a] Listed equity
[b] Fixed income - SSA
[c] Fixed income – Corporate (financial)
[d] Fixed income – Corporate (non-financial)
[e] Fixed income – Securitised
[f] Private equity
[g] Property
[n] Cash
Total externally managed assets
Please ensure the entire table
(both columns combined)
totals to 100%

08.2. Additional information. [Optional]

CMTEDD utilises segregated mandates for share investments.  Direct ownership of the company securities improves control, transparency, accountability and reporting.  Direct ownership allows for the application of the ACT Government's Responsible Investment policy in terms of business activity screening, ESG and global norms risk assessments, as well as the full use of the ACT Government's voting rights.

For the Private Equity asset class CMTEDD utilises a unit trust structure for investment, however this is not a pooled unit trust with assets combined with other institutional investors.  CMTEDD is the only unit holder and there is an individual Investment Management Agreement and Trust Deed applicable to the investment strategy.

Pooled unit trusts are utilised for other asset classes such as unlisted property and fixed income where the scale of assets, diversity of assets and costs are important factors, or where the investment strategy utilises index management.


OO 09. Breakdown of AUM by market

09.1. Indicate the breakdown of your organisation’s AUM by market.

 

 

Developed Markets

 

 

Emerging, Frontier and Other Markets

Total
100%

09.2. Additional information. [Optional]

CMTEDD does not currently invest in any emerging, or frontier, market securities. 

CMTEDD does not consider direct ownership of emerging, or frontier, market securities as practical or cost effective due to onerous custody market requirements, excessive fund management and investment administration costs, individual market and country tax complexities, and reporting and disclosure limitations. 

Investment in emerging, or frontier, market securities can result in increased financial risks as a result of less developed capital markets and lower market liquidity, less developed governance and legal frameworks, increased geo-political risks, and increased currency risks.  There is also an increased potential for conflict with the ACT Government's Responsible Investment policy framework.


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