Telstra Super’s purchase of the Charles River Investment Management System (IMS) last December will improve its ability to insource more investment tasks, according to the $11.5 billion fund’s chief investment officer, Steve Merlicek.
Telstra Super’s growing internal investment team had “outgrown” the selfdeveloped system it previously used, which was based on Microsoft Access Database and required a high level of manual processing, Merlicek said.
Charles River claims the IMS will give Telstra Super streamlined trade order management, real-time pre-trade compliance testing and monitoring, and access to Charles River’s FIX (Financial Information eXchange) network to facilitate real-time electronic trading. Although Merlicek’s team has no immediate plans to add more internal investment functionalities, he said the transition to Charles River would make it easier to insource an activity where the team believed it had a competitive advantage and/or the fee differential justified a move away from external management.
Telstra Super currently runs five portfolios internally. These include active and passive Australian equity portfolios, an active Australian listed infrastructure fund overseen by Merlicek himself, and an active Australian listed property trust portfolio. The latest internal portfolio, established about a year ago, is described by Merlicek as a “direct property proxy”, and consists of large stakes (of up to 5 per cent) in high-yielding, low-leveraged local LPTs which are trading below their net asset values. Investee companies in that portfolio currently include the Tishman Speyer Office Fund and Galileo Japan Trust.