Daniel Selioutine, chief investment officer at Emergency Services and State Super (ESSSuper), has carved out a distinct edge in private credit by focusing on niche, cash-generative strategies that align with the fund’s size and liquidity profile.
Steering clear of crowded syndicated direct-lending markets, the superannuation fund prioritizes asset-backed loans, trade finance, and opportunistic credit, sticking to sectors offering both downside protection and quicker cash returns.
“We avoid syndicated deals because, for a fund our size, the fee compression and competition make it difficult to add value,” said Selioutine, in an exclusive interview with Markets Group.
When he assumed the role of CIO in 2018, ESSSuper’s portfolio was just under A$6B, burdened with fragmented manager relationships and high fees. He prioritized consolidating and rationalizing these partnerships to achieve better scale and reduce costs. Today, with assets surpassing A$11B, the fund has expanded its manager roster while unlocking access to emerging market strategies rarely available in Australia such as Asian private credit and fixed rate loans.
ESSSuper’s private credit program began in 2019 with a modest seed investment into an Australian-based manager that lacked a pooled fund but offered bespoke mandates across opportunistic and higher-risk credit. Rather than competing in global syndicated lending — where scale and steady inflows dominate —Selioutine focused on sub-sectors offering more control and flexibility.
“We don’t have the size or cash flow profile of the mega funds to play there, so we target areas where we can deploy capital selectively, with downside protection and faster cash conversion,” said the CIO.
The fund’s chosen strategies include asset-backed lending, which provides collateralized downside risk; trade finance, with its non-correlated, shorter duration payoffs; and opportunistic credit, which focuses on smaller deals with attractive risk-adjusted returns. These niches align well with ESSSuper’s cashflow needs and allow the fund to pivot as market dynamics shift. Despite rising competition, Selioutine believes early, scalable commercial agreements with managers will protect returns.
“We structure fee arrangements with step downs and co-investment opportunities, enabling growth without sacrificing economics,” he added.
Central to ESSSuper’s transformation has been the integration of artificial intelligence tools. The small but growing investment team has grown from five generalists in 2018 to eight, maintaining broad coverage across asset classes to ensure agility. The team uses AI to accelerate the preliminary review of complex legal documents and risk assessments, dramatically reducing due diligence timelines.
“Tasks that once took weeks can now be done in days, freeing us to focus on deeper fundamental work,” said Selioutine.
Behind the scenes, the fund is at the early stages of implementing AI-driven natural language processing tools that scan and analyze lengthy loan agreements, covenants, and financial statements to flag potential risks or irregularities. The use of AI has enabled Selioutine’s lean team to develop custom databases and portfolio monitoring tools, significantly enhancing the fund’s ability to monitor managers using daily custody data.
This tech-driven efficiency allows ESSSuper to conduct multiple credit assessments simultaneously, without adding headcount. The team complements AI outputs with human judgment, using a collaborative workflow where AI handles data extraction and pattern recognition and portfolio managers focus on strategic analysis and relationship management. This partnership between AI and human expertise has become a force multiplier in sourcing, evaluating, and monitoring private credit investments.
“Our goal is to be thoughtful and disciplined — partnering where we have a genuine edge and where economics make sense,” said Selioutine.
