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Australian Capital Territory

PRI reporting framework 2018

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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.

01.3. 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.

Additionally, the Directorate established the Office for LGBTIQ Affairs during the year to coordinate and support strategic government projects and policy to promote Canberra as the most welcoming city in Australia for LGBTIQ people.

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 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 ACT Government financial investment assets, debt liabilities (ACT Government bond issuance) and treasury operations through the establishment of investment and borrowing policies and objectives and the
co-ordination 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, coordination and reporting.

The estimated total of all CMTEDD staff is in excess of 2,300 (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.

30/06/2017

04.2. Indicate your total AUM at the end of your reporting year, Exclude subsidiaries you have chosen not to report on and any advisory/execution only assets.

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

04.5. Additional information. [Optional]

Total AUM represents the total market value of the financial investment assets managed by CMTEDD on behalf of the ACT Government at the end of the financial reporting year, 30 June 2017.

There are no subsidiaries and no AUM exclusions or the possibility of AUM 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. Select how you would like to disclose your asset class mix.

Internally managed (%)
Externally managed (%)

 

Listed equity 0 0 10-50% 45
Fixed income 0 0 10-50% 39
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% 6
Other (1), specify 0 0 0 0
Other (2), specify 0 0 0 0

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

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

CMTEDD is responsible for the overall setting of investment objectives, implementation of investment strategy, and the ongoing management, monitoring and reporting of the relevant financial investment portfolio assets.  Investment policies, legislation and guidelines clearly outline allowable investment asset class investments and any investment limitations.

The asset class mix dislosed in 00 06.1 is a combination of all of the financial investment assets, and differing investment portfolios, under the management of CMTEDD. The total AUM, and the disclosed asset class mix, incorporates a number of differing investment strategies and financial asset investment portfolios with material differences in their investment objectives. 

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

These financial investment assets are recognised as part of the total Australian Capital Territory consolidated balance sheet.

 


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
30 Corporate (financial)
5 Corporate (non-financial)
20 Securitised

OO 08. Segregated mandates or pooled funds

New selection options have been added to this indicator. Please review your prefilled responses carefully.
Provide a breakdown of your organisation’s externally managed assets between segregated mandates and pooled funds.
[a] Listed equity
100%
[b] Fixed income - SSA
100%
[c] Fixed income – Corporate (financial)
100%
[d] Fixed income – Corporate (non-financial)
100%
[e] Fixed income – Securitised
100%
[f] Private equity
100%
[g] Property
100%
[n] Cash
100%
Asset class breakdown Segregated mandate(s) Pooled fund(s) Total of the asset class(each row adds up to 100%)

08.2. Additional information. [Optional]

External managers are appointed by CMTEDD to manage the Territory’s financial investment assets.

The financial investments assets are invested and managed through the use of a combination of both segregated mandates and unlisted pooled unit trusts, including:

  • directly through an actively-managed strategy using a separate discrete mandate (Territory directly owns the securities) where the investment manager aims to outperform the relevant performance benchmark index (gross of fees);
  • directly through an index-managed index strategy using a separate discrete mandate where the investment manager aims to match the relevant performance benchmark index (gross of fees); or
  • indirectly through an actively-managed or index-managed index strategy utilising unlisted pooled unit trusts where the investment manager either aims to outperform the relevant performance benchmark index or match the relevant performance benchmark index.

CMTEDD acknowledges there can be investment control limitations in circumstances requiring the use of unlisted pooled unit trusts.  However the use of pooled unit trusts for specific asset class investments can provide key investment benefits including ease of investment implementation, improved investment diversification, improved investment liquidity, access to professional management, access to asset class market-based returns, cost effectiveness, investment holding transparency and investment administration efficiencies. 

These benefits can significantly outweigh alternate implementation solutions, such as through the use of segregated mandates, that may otherwise be administratively impractical, more expensive or provide for no additional investment benefits.

 

 

 


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
Total100%

09.2. Additional information. [Optional]

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

CMTEDD does not consider indirect or direct ownership of emerging, or frontier, market securities as practical or cost effective due to limited investment control and oversite through the use of pooled unit trusts, onerous custody market and AUM requirements through the use of segregated mandates, 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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