The P&OSuperannuation Fund is reallocating all of its $166 million in assets to sector-specialist managers and terminating three balanced mandates in the process.
The manager most impacted by the decision is HSBC Asset Management, which loses a $78 million balanced mandate. The fund’s other incumbent managers, Citigroup Asset Management Australia and AMP Henderson Global Investors (AMPHGI), will also lose balanced mandates ($58 and $33 million, respectively), but will be awarded smaller specialist mandates.
Schroder Investment Management Australia and Lazard Asset Management will each be given approximately 15 per cent of the fund’s assets to manage Australian equities, with the exact breakdown of awarded mandates to be decided over the coming months, according to chairman of the fund, Rodney Birdsall.
Citigroup and Credit Suisse First Boston will also be given approximately 15 per cent of the fund’s assets to manage international equities, while Vanguard will be given around 35 per cent of assets to manage fixed interest (both domestic and international) and cash. AMPHGI will invest five per cent of the fund’s assets in direct property.
The decision to move to a sector-specialist approach was made following an assessment of options tabled to the fund by asset consultant, Watson Wyatt, which ran a tender process spreading over six-months. Watson Wyatt is also administrator to the 1900 member fund.
Birdsall says the size of the individual mandates and the rate of asset transition will be determined following an assessment of possible options, as he doesn’t want the fund to incur costs and charges it may otherwise avoid.
HSBC, unlike Citigroup and AMP, isn’t being awarded any of the reallocated funds, despite vying for an Australian equities mandate in the tender process due to other managers showing more “promise”, Birdsall says.
