First State Super has awarded Neuberger Berman a $1.6 billion mandate to provide non-market risk premia in emerging market equities with controlled cost.
First State Super said it may eventually move the portfolio in-house alongside other strategies managed internally.
Neuberger Berman Australia joint managing director, Lucas Rooney, said: "First State Super liked our approach to factor based equity investing, which shows low correlation to competitors."
"Research projects in areas where we have strong expertise, that go on to form part of clients' portfolios, are not uncommon for NB, as is helping clients who are building out internal capability," he said.
Reserve Bank governor Michele Bullock has said the central bank sees private demand picking up over the next year, taking over from public demand.
One of Australia’s largest super funds has acquired an equity stake in the institutional investment advisory firm.
Passive investing is reshaping Australian equities, giving rise to a “no information trade” in which large-cap stocks swing sharply despite little or no fresh news.
RBA governor Michele Bullock warns of global trade risks as domestic inflation cools and employment remains near full capacity.