AUSTRALIA - Watson Wyatt has become the first consultant appointed to the A$18bn Future Fund, although in an exclusive interview with Global Pensions, the fund's chairman said it reserved its right to appoint additional asset consultants going forward.
In a statement, the Future Fund said that Watson Wyatt had been appointed to help the government-owned fund in "establishing an investment mission and philosophy", developing the "strategic asset allocation" and "setting the transition strategy for entry into financial markets".
Commenting on reasons for the win, David Neal, head of investment consulting at Watson Wyatt in Australia, told Global Pensions: "I think our ability to work flexibily with our clients, to mould ourselves around their own set of capabilities, was important.
"The Future Fund will be building its own internal team from scratch, and so they needed some comfort that their consultant was able to support this process and evolve with it. I imagine other factors would be our ability to bring global best practice to them, with no bias or conflict, and our deep local and global experience of similarly large, sophisticated investors."
Earlier this month, David Murray, the fund's chairman, told Global Pensions the fund was "reserving its position" to appoint more than one asset consultant going forward, as it might want to "focus on specific asset classes" in the future.
The fund, which will become Australia's largest institutional investor, was set up by the ruling Liberal government in May last year to combat the the A$98bn deficit in civil servant superannuation and currently has seed funding of A$18bn invested with the Federal Bank.
It will be funded through unscheduled government contributions and is expected to have $50bn in assets under management by next year, increasing to $140bn by 2020.
This is the second mandate win for Watson Wyatt with the fund. In July 2005, it won a short-term contract to assist the Australian government in forming the investment mandate for the fund, prior to its launch.
Paul Costello, general manager of the fund, also announced the appointment of Thomas Murray Limited, a London-based firm specialising in the global securities services industry, to assist internal staff in the process of selecting a custodian.
*Look out for our interview with David Murray in the December edition of Global Pensions.
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