(August-2002) Funds SA drops Deutsche from listed property mandate

Funds SA drops Deutsche

South Australian fund manager for public sector superannuation funds, Funds SA, has terminated a $150 million listed property mandate with Deutsche Asset Management (DAM) and reallocated the monies to Macquarie Funds Management ($100 million) and boutique manager SG Hiscock ($50 million) after completing its listed property review.

The $5.4 billion fund’s other allocation to listed property, $140 million, remains with incumbent manager, Rothschild Australia Asset Management (RAAM).

According to chief executive officer of the Adelaide-based fund Rick Harper, the two new appointed managers will see their mandates expand to match the RAAM allocation as new monies come into the fund, forming “a three-pronged active manager line-up”.

The SG Hancock and Macquaire appointments will leave the fund’s ratio of listed to unlisted property unchanged at 60 to 40 per cent, respectively.

“We’ve reviewed the ability of active listed property managers to outperform rival areas, and believe there is an opportunity to generate some alpha…and prefer active management over passive management,” Harper says.

The tender process was conducted by the fund’s asset consultant, Frank Russell Company, which is also in the early stages of conducting a review of Fund SA’s Australian equities managers.