Equipsuper brings itself into line

The $3.7 billion profit-for-member fund Equipsuper has added two investment choice options and changed the structure of the existing three to “bring them more into line with the nomenclature used by our peers”, according to chief investment officer Michael Strachan.

The new ‘Balanced’ and ‘Growth’ options will offer the classic growth/defensive asset splits of 85:15 and 50:50 respectively. Permitted ranges for each asset class have been introduced, which Strachan said would “provide us with greater flexibility to deliver better investment returns, by adjusting asset allocations to take advantage of market conditions and trends”. For example, the new Growth option’s benchmark Australian equities allocation is 40 per cent, with a permitted range of 30-50 per cent. Two new asset classes within the options have been introduced, ‘growth alternatives’ and ‘defensive alternatives’. Strachan said Equipsuper had invested in private equity and infrastructure since the mid-1990s, and more recently a Mesirow hedge fund-of-funds, but previously these investments had been “caught up” inside the equities allocation. “There was no such thing as a ‘private equity’ asset class when we started doing it,” he pointed out. Meanwhile the ‘Growth Plus’ option has been stripped of its entire 20 per cent property allocation, because options with that name offered by other funds tended to be 100 per cent equity options, Strachan said. The default Balanced Growth option, where the bulk of Equipsuper’s accumulation accounts reside, has slightly reduced its property and Australian equities allocations in order to accommodate a 5 per cent weighting to growth alternatives and 5 per cent increase to international equities. In keeping with the spirit of alignment to its peers, Equipsuper has also switched from Mercer to SuperRatings for its benchmark comparisons, arguing that Jeff Bresnahan’s shop enables benchmarking against a much wider universe of super funds.