Sunsuper has committed $200 million in a segregated mandate to a Japanese equities manager through its satellite portfolio, which targets opportunistic themes.
The $13 billion fund has appointed Lazard Asset Management to invest in the Japanese market, which has been “beaten down so much the earnings have become quite positive,” David Hartley, chief investment officer of Sunsuper, said. While many institutions had persistently invested in the Japanese market, some had recently “given up the ghost,” he said. In addition to the argument that the market presents good value, Hartley said its status as a commodities importer also made it a hedge against a rupture in Australia’s booming commodities market. “The Japanese market has been beaten up for a long-time, and has been at the wrong end of the commodities boom, but it is trading at good value. “If commodity prices give up, Australia could be hurt, and having Japan on the other side can’t hurt.” “Japan has been forgotten and could still be for a long time.” Hartley expected the country’s banking sector to not bear subprime wounds of the same magnitude as those incurred by US and European banks – even though the sector is reported to have written off US$8 billion. Sunsuper looks for opportunistic themes to manage in its satellite portfolio. A $200 million allocation to a large-cap ‘quality’ fund run by GMO is an existing investment. The fund was built in the late stages of the last bull market, when the manager noticed that many investors were selling large-cap shareholdings to buy more private equity. Sunsuper was a seed investor in the product. “We do a lot with the satellite portfolio. It’s an opportunistic strategy – some investments might be permanent, some temporary.” Outside this portfolio, up to $2 billion of Sunsuper’s funds under management is invested in the AMP Future Directions fund, of which Hartley is an investment committee member. Hartley said the decision to invest in the Japanese market through Lazard was made during a research trip overseas in June with Josh Bloom, the fund’s portfolio manager of listed equities. The mandate was funded by cash flows and implemented in the first week of September.
QIC is gearing up to expand its hedge fund allocation as – together with insurance exposure – the “strong double-digit return” of its liquid alternatives portfolio was a key contributor to the fund’s record $8.9 billion earnings in the 2024 financial year. Chief investment officer Allison Hill explains why global sovereign wealth funds are hot on hedge funds.
Darcy SongOctober 24, 2024
