Following its first asset consulting tender since 2000, the $3 billion Australian Government Employees Superannuation Trust (AGEST) has decided on a provider.
The industry fund has re-appointed Frontier Investment Consulting as a traditional consultant to cover all asset classes. Michael Seton, the chief executive of AGEST, said the tender process, which began in the latter stages of 2007, was “long and deliberate” and involved “all of the asset consultants”. Seton said the fund was never dissatisfied with Frontier’s performance but considered it good governance to review the market. While the potential appointment of specialist advisers had been discussed during the tender process, the fund had not yet “gone down that path,” he said. Frontier has advised the fund since 2000, when AGEST held mandates with eight investment managers. It now conducts business with 40 managers, and has built substantial allocations to infrastructure and private equity funds. At present, the fund is comfortable with its current asset allocation, Seton said. “Our asset allocation is where we want it to be. Changes made [in investment manager mandates] are just tinkering around the edges.” The most recent changes have been in its infrastructure and private equity portfolios. Earlier this year, the fund committed $US25 million to the Northgate PEP IV fund. In 2007, it terminated a mandate with Bridgewater Associates’ All Weather Fund while committing $US25 million to a Siguler Guff small companies buyout fund. AGEST was not disappointed in the performance of the Bridgewater fund but, since it used the product as a “proxy for infrastructure”, transferred this capital to infrastructure funds run by Industry Funds Management as opportunities arose, Seton said. Infrastructure investments account for 8 per cent of the fund’s assets, while private equity speaks for 4 per cent of funds under management. AGEST aimed to increase this allocation to 6 per cent, at the expense of its holdings in listed markets, Seton said.
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