AUSTRALIA - UniSuper, the A$19.3bn Australian superannuation fund for workers in the higher education and research sector, has restructured its public markets portfolio, awarding mandates for long/short and concentrated strategies and increasing its use of boutique managers.
The A$1.15bn rebalancing was funded by the termination of five existing mandates, said David St. John, UniSuper’s CIO. St. John declined to name the five terminated managers, because there was a “broad range of reasons for changing managers.”
UniSuper’s public markets portfolio comprises domestic and international equity, fixed income and cash.
“The money required to fund the rebalance came from a combination of cash flow and the termination and transfer of five mandates,” he said.
“None of the managers were terminated for the purposes of tilting, but there was some restructuring of the asset classes to accommodate more concentrated mandates.”
UniSuper allocated concentrated mandates to Quest Asset Partners
$330m), Challenger Managed Investments ($356m) and LINWAR Funds Manage-ment ($110m); allocated $225m to State Street Global Advisor’s Global Alpha Plus fund, a 130/30 long/short global equity strategy; and allocated $75m to Mondrian Investment Partners and $50m to JF Capital Partners for emerging market mandates.
The fund decided to pursue long/short strategies for its Australian and international equities as a way of adding active returns.
“The selection of the managers for these strategies is the key to success since each manager must have both the necessary skills to implement the strategies and be able to control the associated risks,” St. John noted.
“Fortunately, there are some very capable managers that can be included in the portfolio. However, the use of long/short strategies is only part of the process for adding active returns. As such, the allocation to long/short managers is modest. We don’t consider the allocation to be a tilt.”
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