The industry fund for electrical and communications contractors, ConnectSuper, has dealt out a number of new mandates and terminated other contracts to align itself with a more defensive investment style.
ConnectSuper chief executive, Sean Leonard, said the $560 million fund’s move to a more defensive position involved looking more closely at value-style managers. “We thought our previous asset allocation was a bit too ‘growthy’, and we’re looking to reposition the fund with stronger defensive characteristics,” Leonard said. “We’ve taken up more value-driven managers. It’s not a move from growth-style asset classes to defensive, but to move away from a growth tilt…It’s more to introduce different manager style.” The managers who have been dealt fresh mandates from ConnectSuper are: Credit Suisse Asset Management for a $58 million diversified fixed income contract which incorporates UK fixed income manager Pioneer; Lazard for a $24 million ‘non-core’ domestic equities mandate; Orbis which was assigned $14 million to invest in its long-short international equities capability; DB RREEF for a $13 million placement in its diversified property trust, run in partnership with Deutsche Bank; and Fauchier Partners, a UK-based fund-of-hedge fund manager, which has been allocated $13.1 million. As a consequence of the restructure, ConnectSuper terminated an Australian equities contract with Ausbil Dexia, a global tactical asset allocation mandate with Tactical Global Management and an emerging markets issuance with Dimensional. The decision to move to safer investment terrains was not instigated by the recent credit sickness and market volatility, Leonard said. “We approved the new allocations in April, well ahead of the turmoil.” Along with the new allocations, ConnectSuper has demarcated between growth and defensive alternative assets, defining them as separate asset classes. Leonard noted the social infrastructure fund, run by Industry Funds Management, had become a solid example of a ‘defensive alternative’ since it integrated with the manager’s main infrastructure fund. “That changed its risk characteristics. We didn’t hold it as a defensive alternative before,” Leonard said.
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Hosted by Simon HoyleDecember 9, 2024
