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Industry fund reveals new mandates

An industry superannuation fund has overhauled its investment strategy, terminating and replacing several managers in the process.

Following the recent termination of AMP Capital as investment manager for its Balanced Socially Responsible option, as first reported by Financial Standard, legalsuper has outlined more changes to its investment manager lineup following a review of about 80% of the fund's assets by chief investment officer Norman Zhang.

While the review is ongoing, legalsuper confirmed it has terminated the Australian equities mandates held with Allan Gray and Yarra Capital. It has also terminated a mandate held with Cooper Investors which had been in place for more than 15 years, according to Rainmaker data.

Rainmaker data from June of this year shows the mandate with Allan Gray was worth about $146 million and had been in place since 2016. Meanwhile, Cooper Investors was managing $279 million. It's not known how much the Yarra Capital mandate was for.

The three managers have been replaced with AllianceBernstein, though the mandate size was undisclosed, and Solaris Investment Management saw its existing $289 million mandate topped up.

Elsewhere, legalsuper said its cash mandate with First Sentier has been terminated, replaced by IFM Investors. The mandate with First Sentier was valued at $150 million, according to Rainmaker.

Finally, Colchester Global Investors has also seen more money, with the fund confirming it has increased an alternatives mandate held with manager. At the same time, it has terminated a mandate with Aberdeen Standard Investments.

When it comes to global equities, legalsuper confirmed decisions have been made and are in the process of being implemented. Zhang described the changes in this area as "significant".

Zhang told Financial Standard the investment strategy has been formulated to maximise net of fee performance for members in a risk controlled manner.

"Our strategy focuses on continuously building on our competitive advantages of market access, speed and flexibility. In the context of the challenges presented by COVID-19, legalsuper has evolved its investment strategy and made significant inroads in executing key initiatives during 2020," Zhang said.

He added that the changes centre on increasing the fund's preference for active management and enhancing scale benefits by consolidating the number of managers to those in which it has the most conviction.

"legalsuper pursues ongoing innovation and improvement in its investment approach, continually focussing on identifying and executing opportunities to enhance and increase the resilience of our investment program," Zhang said.

Zhang joined legalsuper in March of this year, having previously served as chief investment officer at Media Super for three years.

At the time, legalsuper chief executive Andrew Proebstl said Zhang has a passion for innovative and niche investment approaches.

Read more: RainmakerAllan GrayCooper InvestorsFinancial StandardFirst SentierYarra CapitalAberdeen Standard InvestmentsAllianceBernsteinAndrew ProebstlColchester Global InvestorsIFM InvestorsMedia SuperNorman ZhangSolaris Investment Management
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