In October this year, Frontier Advisors announced an exciting plan to bring the entire investment team from long-term client State Super NSW into the firm to facilitate a unique new service offering for the small to medium institutional investment market.
Labelled ICIO, or an independent chief investment officer service, the new solution, along with the innovative plan to lift and shift the highly regarded investment management team inside the firm, has captured attention within the market.
The move also saw the addition of State Super as a new owner in Frontier. The incoming capability led to an expanded independent valuation of Frontier which enabled the current owners to dilute their share of equity without any loss of value.
At the same time, First Super and Cbus agreed to swap their holdings in an unrelated and separate transaction. The new ownership structure will see AustralianSuper, Hesta, First Super and State Super each with a 23.6% stake, while Cbus holds the remaining 5.6%.
State Super will nominate a representative to join the Frontier Board in early 2026.
While the switch of equity holding between First and Cbus happened separately from the addition of State Super as an owner, the deal is indirectly related to the ICIO plan following First Super’s assessment of that development. First Super felt the growth opportunity facing Frontier following this initiative meant they wanted to increase their holding in the business. As a smaller fund the value of this upside was more material than would be the case for a fund the size of Cbus. This is a strong vote of confidence in Frontier from a long-standing shareholder.
The switch of holdings has no impact on the operations or strategic direction of Frontier as both parties continue to hold a position on the Frontier Board and all owners have an equal voting right irrespective of the size of their holding, so that balance remains. Both parties continue to remain as clients.
Frontier has officially welcomed its new ICIO team colleagues from State Super into the business, effective from 1 December. This provides a physical presence for Frontier’s broader firm and a number of existing Sydney based Frontier staff will now be located out of the Clarence Street office in a group numbering just under twenty.
State Super will effectively be client number one for the new ICIO service with a seamless transition that will not disrupt the fund’s investment operations or portfolio and will leverage State Super’s existing custodian.
In terms of client two and beyond however, Frontier has now assembled all of the pieces required to offer their service following an extensive process to select a custodian which is now complete, pending final contractual due diligence and agreement. The firm expects to be able to onboard clients into the new solution in the last quarter of this financial year.
Early indications are there could be a number of potential candidates to fill the spot of ICIO client number two with strong interest in the unique offering already coming forward. Frontier’s solution offers a custody and reporting service, while allowing investors to execute their decisions across the products and managers of their choice, rather than having to accept the products of their provider. It is this latter element, the ‘I’ for independent in the ICIO brand, that is registering strongly with potential investors.
