News & Analysis

First State Super CEO: Blue Sky investments have ‘outperformed expectations’

The Australian superfunds’ retiring CEO has said it is ‘comfortable and satisfied’ with its investments with the troubled asset manager.

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Outgoing First State Super CEO Michael has said that he is happy with the fund’s investments with embattled manager Blue Sky.

Speaking to Agri Investor, Dwyer said First State Super’s investments with Blue Sky, which are split between almonds and water, have performed well.

“From our point of view, these investments have outperformed our expectations,” he said.

“We’ve been with Blue Sky for some time, and the mandate they’ve got from us is solely focused on water and almonds. They’re managing those according to our expectations. We understand they’re having some distractions in other areas at the moment, but we’re comfortable and satisfied with the job they’re doing for us.”

First State lists on its website a A$148 million ($111.7 million; €95.6 million) investment in five almond farms in New South Wales, Victoria and South Australia covering more than 2,600 hectares. That investment was made in June 2015 and was advised by Blue Sky’s Kim Morison, who took over as the firm’s managing director in May following the departure of Robert Shand.

The deal saw First State Super buy and lease back the almond orchards to Select Harvest, with the superfund owning the land and Select Harvest retaining ownership of the almond trees.

It is understood that First State Super has a similar amount of money invested in water through Blue Sky.

Dwyer’s comments come amid a difficult period for Blue Sky Alternative Investments, which came under attack from US short-seller Glaucus in late March. Since the attack, the fund manager’s share price has tumbled from A$11.40 to A$2.55 (as at market close on June 1). Blue Sky also announced several changes to its board to make it more independent and withdrew its guidance for underlying net profit after tax for FY18 and fee-earning assets under management for FY18 and FY19.

Dwyer will retire as CEO of First State Super in November this year. He will be replaced by Deanne Stewart, currently chief executive of MetLife’s Australia business.