The Victorian Funds Management Corporation (VFMC) emphasised “people skills” in its appointment of a new chief investment officer, chief executive of the $37 billion manager, Syd Bone, said last month while also revealing two poaches from Invesco for the nascent internal Australian equities team.
The new CIO, former State Street Global Advisors Asian CIO, Justin Pascoe, is a quant with no experience managing unlisted assets (which are increasingly important for VFMC) but Bone said this was insignificant in terms of his other qualifications. “He’s overseen strategy, portfolio construction and risk budgeting for multi-asset portfolios, he’s very experienced with derivatives, and most importantly from what we’ve seen of him he’s fantastic with people – which is a pretty rare skill in this field.”
Pascoe has just spent a year running the quant investment strategies team for Goldman Sachs Asset Management in Hong Kong, but Bone said that preceding CIO Leo De Bever had structured the organisation in such a way that an overall balance between fundamental and quant insights, as well as beta and alpha pursuit, would be maintained.
Once he relocates his family from Hong Kong to Melbourne and clocks in at VFMC on September 8, one of Pascoe’s first tasks will be to appoint a head of strategy – a role created 18 months ago (but not yet filled) when the investment committees of VFMC’s public sector fund clients were dissolved in favour of a centralised model.
That model calls for an increasing internalisation of investment manufacturing, and to that end VFMC has also just hired two analysts away from Invesco – Kieren Singh and Edmon Odza – who in due course will start managing a core qualitative Australian equities portfolio, reporting to investment director of equities and property, Kent Sutherland.
While VFMC’s roster of external Australian equities managers has been culled from more than 20 names at its peak to less than 10 today, Bone said the alpha team would always retain some highly skilled domestic shops, but usually for their concentrated or long/short funds. Pascoe is a native Melbournian, began his career as an asset consultant for Towers Perrin, and sits on the advisory panel for the Shanghai Stock Exchange.