Russell Investment Group has let go three private markets consultants, as the loss of alternatives advice contracts with the Telstra and Australia Post super funds lead to a reduction in the breadth of alternatives research done from Australia.

Andrew Goddard, the head of private markets research and two-decade veteran of Russell and preceding firm Towers Perrin, was retrenched in late February alongside two other members of his Melbourne-based team, Peter Worcester and Neil Stanford. (Stanford was a contractor whose contract was not renewed.) In a recent note to clients, Russell confirmed that the private markets team had been brought under the leadership of Andrew Lill, who now also oversees the traditional consulting and investment strategy teams following a January restructure. In the note, Lill said that following being dropped in 2007 by Australia Post and Telstra Super for alternative products research, Russell’s efforts from Australia “;will not be based on those two funds’ research needs”;. Lill said that Henry Stephens and John Xu had been retained from Goddard’s team to research funds-of-funds in private equity and infrastructure, as these products were what remaining advisory clients demanded information upon. Asset classes previously covered by Goddard’s team – hedge funds-of-funds, commodities and timberland – would now be covered by a growing research team in New York, and one in Tacoma, as they were demanded, Lill said. As advisory clients demanded single-manager research on private equity and infrastructure, this could be accommodated by Australia’s 21-person investment strategy team, Lill promised. Goddard said he had been “;a bit shocked”; at the break-up of his private markets team, which he said had allowed Russell to fully implement local clients’ alternatives portfolios using research on a broad range of asset classes and contacts to gain access to the best managers. He said he was presently “;improving his surfing skills”; off Victoria’s Mornington Peninsula, but was “;evaluating options”; for a return to the investment advisory industry. He said he remained in touch with Stanford and Worcester (who has returned to his eponymous investment consulting business) but the three had no plans to set anything up together. Telstra Super’s internal head of alternatives, Nicole Connolly, said the $11 billion fund had decided last year that herself and colleague Marie Lesso were able to oversee the 15 per cent exposure to private equity, infrastructure and hedge funds internally. Telstra Super uses Wilshire Global Advisors for Australian private equity advice, and will use other consultants for one-off projects as it sees fit.

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