A large NSW public sector fund is reviewing all of its domestic and international fixed income allocations.
Craig Turnbull, chief investment officer of the $6.1 billion Local Government Superannuation Scheme (LGSS), said its $670 million in Australian fixed income holdings, currently with FuturePlus, and $280 million allocation to international fixed income, managed by PIMCO and Loomis Sayles & Co., were under review. “We’re reviewing all fixed income allocations. We believe there may be further efficiencies to be gained in terms of how we run the money compared to the way we do now.” The structure of the fund’s future fixed interest portfolio — whether it will be split into domestic and international allocations, or whether it will assign both active and passive mandates, for example — were due to be finalised during upcoming investment committee meetings. Peter Lambert, chief executive officer of LGSS, said the fund had identified potential cost savings in its fixed income portfolio. “We use FuturePlus as a manager, and have identified that there are cheaper options that can deliver similar types of outcomes,” he said. LGSS employs Intech and FuturePlus for general asset consulting services and Quentin Ayers for advice on illiquid investments.
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
