The $720 million corporate super fund MasterSuper has increased its exposure to managers with a higher tracking-error in a bid to add value.
In a series of mandate changes implemented over the past 12 months, Perth-based MasterSuper has appointed complementary, high-conviction, benchmark-unaware mangers across Australian and international equities. In Australian equities, Mellon Australian Equity Long/Short Trust, BT Wholesale Focus Australian Share Fund and MIR Investment Management were appointed at the expense of Wallara Asset Management, Concord Capital and GMO. Meanwhile in international equities, GMO was terminated and holdings in other existing managers were pared back to make space for Marathon Asset Management, Mellon Global Intrepid Fund (managed by thematic specialist Newton), and Arrowstreet Emerging Markets Fund. Fund secretary Mark Sladden said that over time, less benchmark-aware managers were more likely to create additional value. The fund has also been gradually increasing its alternatives and infrastructure exposure (currently at 22 per cent), from fixed interest and cash. Sladden said that with the fund’s current cash flow, liquidity was not a concern. “We can liquidate 75 per cent of the portfolio within a week,” he said. MasterSuper has 12,500 members.
There is one investment area where Insignia’s $180 billion super arm has not lost money for the past 17 years, which is what it calls the insurance-related investments. The alternatives strategy is gaining popularity among asset owners due to its diversification benefit, but Insignia’s super and asset management investment chief Dan Farmer warns it is a space where investors can suffer if they “stumble in without doing the homework”.
Darcy SongJanuary 23, 2025
