Close to $1 billion dollars worth of new Australian equities mandates have been handed out by industry superannuation fund VicSuper as part of an investment overhaul.
AllianceBernstein, Perpetual, Tribeca Investment Partners, SG Hiscock and Vinva will now run actively managed Australian equities for VicSuper, which funded the new mandates by taking money away from passive Australia equities mandates run by BlackRock and the SSgA Australian SAM Sustainability Fund.
All the mandates are worth $165 million each, except Vinva's which is worth $330 million, and collectively they represent approximately 10% of VicSuper's total funds under management.
VicSuper only used BlackRock and the SSgA Australian SAM Sustainability Fund for its Australian equities investments and the decision to fund the new ones through a drawdown was not performance based, Oscar Fabian, VicSuper chief investment officer told Financial Standard.
"These new mandates had to be funded from somewhere. We didn't have a great deal of choice as there was only two," he said.
The new appointments are part of a strategic review of investments at the fund, which has been underway for 18 months, he said.
The new managers will be used to populate VicSuper's 'core plus satellite' investment structure.
Currently around 60% of VicSuper's Australian equities are in the core, which is passive or enhanced index, and the remaining 40% is in actively managed satellites, said Fabian.
Given this mix, the new satellite managers will be highly active and benchmark unaware with the aim of further improving the Fund's overall asset class performance, he advised.
VicSuper has already revamped its international equities and global fixed interest investments in a similar way, and is working with asset consultant Frontier Advisers to find new managers for its real assets and property investments.
United States based Payden & Rygel as well as Stone Harbor Investment Partners were awarded new international fixed income mandates in April this year, also funded by a drawdown from a mandate held by BlackRock, Fabian said.
Money was also recently taken away from a mandate held by Vanguard to fund new international equities mandates awarded to New York-based Global Thematic Partners, Martin Currie, Walter Scott, and Sanders Capital, which was founded by former AllianceBernstein CEO and chairman Lewis Sanders.
Fabian said that BlackRock was aware money would eventually be taken away from its VicSuper mandates to pay for the new investment structure when they were originally awarded.